Business Economics for Independent Bureaucracy- MyAssignmenthelp

Question: Discuss about theBusiness Economics for Independent Bureaucracy. Answer: Australia has a free market economy. It has been showing impressive economic growth in the past 25 years. The country has abundant natural resources as well as efficient governmental system, independent bureaucracy, well developed legal system, all of which led to a strong entrepreneurial development in the economy. The GDP of Australia was 1.34 trillion USD or AUD 1.62 trillion in 2015 (World Bank 2017). (Source: World Bank 2017) According to the data of World Bank, the GDP of Australia has shown growth since 2008, reaching highest at $1563.9 billion. The Australian GDP represents 2.16% of the world economy. It grew 1.1% in the last quarter of 2016. The Australian economy is showing a trend of growth recently. The economy has 2.4% annual growth, which is more than predicted 2% growth. The GDP although fell to 1.34 trillion USD in 2015, it witnessed a little fall in the economic performance in 2015 from the previous years. However, the economy of the nation bounced back to healthy growth in Q4 of 2016, due to a rise in the corporate profits because of rising prices of the commodities, a rise in exports and high level of household spending. Australia is on the way of making a record of 25 years of consecutive growth (Smith 2017). The forecast of growth says in 2017, it would grow 2.5% in 2016-17 and would pick up the growth of 3% in 2017-18 due to relaxation of detraction from declining mining investment. The country is diversifying its investment from mining to other growth areas (Treasury.gov.au 2017) The economy of a nation is always unpredictable. There can be sudden ups and downs. There are risks in forecasting, as the economy might not follow the forecast. Recent political developments of a nation, inflation and unemployment levels create risks for forecasting. The cross border integration, migration crisis, other countries economic and political policies, all affect the economic condition of a nation, and that can surpass the economic performance growth forecasts positively or negatively (IMF 2017). Fiscal and monetary policies are two most important tools of a government. These help to stimulate the economy or slowing it down as per the requirement. To improve the economic performance, the government uses the expansionary fiscal policy, by decreasing taxes, and financing budget deficit. When it decreases the tax amount, the producers would produce more, and households have more disposable income. Hence, consumption spending increases in the economy and leads to a rise in aggregate demand and consequently economic performance improves. On the other hand, expansionary monetary policy contributes in improving the economic performance of a country. It targets the interest rate and money supply in the economy. When the economic performance is low, government lowers the interest rate. Borrowing becomes cheaper and producers borrow more money to increase production. This way economic performance of the nation improves (Baker, Bloom and Davis 2016). References: Baker, S.R., Bloom, N. and Davis, S.J., 2016. Measuring economic policy uncertainty.The Quarterly Journal of Economics,131(4), pp.1593-1636. IMF, 2017. IMF World Economic Outlook (WEO) Update, January 2017: A Shifting Global Economic Landscape. [online] Imf.org. Available at: https://www.imf.org/external/pubs/ft/weo/2017/update/01/ [Accessed 20 May 2017]. Smith, J., 2017. Australia bounces back to robust GDP growth. Financial Times. [online] Available at: https://www.ft.com/content/3d8910fe-fe1b-11e6-96f8-3700c5664d30 [Accessed 20 May 2017]. Treasury.gov.au, 2017. Economic outlook | The Treasury. [online] Treasury.gov.au. Available at: https://www.treasury.gov.au/PublicationsAndMedia/Publications/2016/PEFO-2016/HTML/Economic-outlook [Accessed 20 May 2017]. World Bank, 2017. GDP (current US$) | Data. [online] Data.worldbank.org. Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD [Accessed 20 May 2017].