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... Australia’s strong economic performance over the past decade has been the result of effective macroeconomic management and structural reform by the Commonwealth government, along with a competitive private sector and a flexible workforce.
Australia has four macroeconomic objectives: full employment, price stability, economic growth, and external balance. ... Realizing economic growth requires the annual change in GDP to be between 4 to 5 percent. ... This is achieved through a stable exchange rate, low foreign debt, and reducing the Current Account Deficit (CAD). ... It is forecasted that Australia would not be able to achieve her economic growth objective this year, possibly due to Iraq war, among other events. ... The Current Account shows a deficit of $10. ... The large debt and Current Account Deficit (CAD) is partly due to the global economic slowdown and the prolonged drought in Australia. As a result of diversification of Australias export industries, her terms of trade have improved. ... But since Australias inflows are not sufficient to pay for her money outflows, she has not achieved external balance. ... The current aim of the government is to maintain budget balance over the course of the economic cycle. ... This complements with the current budget. ... Since Australias current fiscal and monetary policies aim to increase demand, this would lead to an increase in economic growth, but at the same time an increase in prices. ... Therefore, although economic growth and full employment would be achieved, price stability and external balance would not.
On the other hand, Australias prices and incomes policy is able to influence the supply. ... This helps to achieve full employment, economic growth, and price stability. ... Also utilized is the trade policy, in which Australias participation in trade agreements would also encourage greater competition and efficiency among local firms.
Approximate Word count = 1374
Approximate Pages = 5.5
(250 words per page double spaced)
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