• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13

The Relevant Market

Extracts from this document...

Introduction

Economics ECF1110 Assignment 3 A Collect, organize, present and analyse a range of data which describes the current state of the Australian economy(with respect to the trade cycle). B Describe and analyse the monetary policy stance which has been adopted by the RBA over the past 2 years. How effective is monetary policy in achieving the policy objectives of the government? Assignment Due: Week 13 Student Mark Etherton -2030088 Tutor Greg Parry Introduction Part A This report contains an informed and balanced analysis of a range of data which assists in depicting the current state of the Australian economy in relation to the trade cycle. Relevant Data For various reasons, economic activity fluctuates from year to year. Periods of rising activity, output and income are called booms and periods of slower activity are called a trough. Generally when real GDP is above 4 per cent p.a. it would be considered a boom year and when there are technically, two consecutive quarters of negative economic growth it would be considered a trough or a recession. In the short term the level of economic activity fluctuates. ...read more.

Middle

Low interest rates coupled with uncertainty with the share market has continued to blow this bubble. The housing boom has assisted in counteracting the effects of negative factors on economic growth such as the decline in tourism due to terrorism and SARS along with the effect of the drought on agricultural yields. Value of new residential building commencements trends $ M |7000 |6000 |5000 |4000 |-----------------|------------------|------------------|-----------------|-----------------| 3000 Jun Jun Jun Jun Jun Jun 1992 1994 1996 1998 2000 2002 Australian Cash/Interest rates The reserve banks monetary policy appears to have been quite successful in keeping interest rates at a low level to ensure that there is economic growth whilst still keeping the inflation rate at a manageable level. The record low cash rate has remained unchanged at 4.75% for almost a full year ensuring that strong investment in the housing sector mainly, but also in industry continues. The Australian cash rate although low is relatively high in comparison to the international economy. This again would lend to the believe that the Australian economy remains solid amidst global uncertainty. Australian Cash Rate % 6 | 5 | 4 | 3 | ---M----J----S----D----M----J----S----D----M----J----S----D-- Quarters 2001 2002 2003 Sales of New Motor Vehicles Sales of new motor vehicles is another factor which assists in reflecting the state of the economy. ...read more.

Conclusion

Credit to the household sector has been growing at an exceptionally fast rate, but borrowing by businesses has been more subdued, even though profits have generally bee healthy and they appear to have ample funding available for their investment plans. Over all the Reserve Bank believes that conditions in Australian financial markets continue to be supportive of growth in spending and activity. Even though the Australian dollar has been appreciating, and this can impact on the export market, the dollar has been quite subdued and is appreciating from a fairly low base so the impact should be nominal at this stage. I consider that the Reserve Bank Monetary policy has been quite successful over the last couple of years, as the Australian Economy has fared well considering this time of global uncertainly, not to mention that I have a number of home loans and appreciate the affordability and option of low fixed rate terms. Reference List 1. ECU 'Economics 1', guide, pages 78, 79, 80. 2. Gans Joshua, King Stephen, Stonecash Robin, "Principles of Economics". 2000, Ch. 17, pages 366 to 379. Harcourt. Australia. 3. Australia Bureau of Statistics internet site address http://www.abs.gov.au/ausstats/abs 4. Hobbs, Dr Brad, Florida Gulf Coast University - Economics internet entry. 2002, site address http://itech.fgce. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. The Housing Market

    1977 1 21 1987 1 59 1997 1 106.2 1977 2 21.3 1987 2 60.4 1997 2 107 1977 3 21.9 1987 3 61.6 1997 3 108.6 1977 4 22.5 1987 4 63.1 1997 4 110.2 1978 1 23.1 1988 1 63.9 1998 1 111.5 1978 2 24.2 1988 2

  2. Macroeconomic Objectives and their impact on Business Activity

    Frictional Unemployment: The Glossary of Economics Terms defines frictional unemployment as: "Frictional unemployment is unemployment that comes from people moving between jobs, careers, and locations." This basically means that people who are not working and are simply between jobs. This maybe the result of changes in the technical conditions of work, being hired elsewhere or simply relocating etc.

  1. world oil market

    OPEC produces around 40% of global supply. OPEC was formed in 1960 by several oil producing countries which are substantial net exporters of oil in order to help co-ordinate oil producing policies of member states in order to stabilise the oil market and maintain a 'reasonable' profit.

  2. Chinese car market overview. Citroen case study

    In a few words we can define it's positioning as follows: " Citro´┐Żn C3 : a unique personality combining well-being with all round versatility " C) COPY STRATEGY The copy strategy summarises what the message has to communicate. The questions that we will ask ourselves to establish this strategy will be: * What are the benefits for the consumers?

  1. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    have less future growth then competitors as the industry average is 2.9, which means Bellway's exposure to regeneration schemes and Pathfinder Project have not been recognised yet. 5. Conclusion & Recommendations Bellway's has achieved its 14th consecutive year of organic growth in 200533 when many of its competitors have struggled in the current slow market.

  2. Tourism market analysis Polish economy

    In addition, there are several projects proposed which will further increase supply in the next few years. Hotels that opened during the course of 2003 and 2004 include the following. * The 44-room boutique Hotel Rialto located on Wilcza Street opened in June 2003; * The 361-room Westin Hotel located on Al.

  1. What effects have interest rates had on economic indicators like GDP, Inflation ,Unemployment and ...

    Interest rates directly affect the amount individuals and businesses want to borrow. When interest rates are low firms invest in machinery, equipment, buildings etc and this direct investment leads to economic growth i.e. GDP goes up. High interest rates have the opposite effect and this has a significant affect on the level of aggregate demand.

  2. An Empirical Investigation into the Causes and Effects of Liquidity in Emerging

    This implies that there are 3 disequilibria in the model. The VAR(3) can then be reformulated into a Vector Error Correction Model (VECM) form: ?zt = ?1?zt-1 + ?2?zt-2 + ?3?zt-3 + ?zt-1 + Ut where ?i = - (I - A1 - A2 - A3), (i = 1, 2, 3)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work