Australia s Current Economic Growth - 1390 Words

Introduction Economic growth is defined as a quantitative sustained increase in a nation’s output, referring to the volume of goods and services produced, over a period of time, generally per annum. It is indicated by an increase in the real GDP, which implies a rise in a nation’s economic capacity. As such, Australia’s current economic growth rate is 3% (May 2016). Inflation refers to a sustained increase in the general level of prices over a period of time, usually one year. It is measured by the percentage change in the consumer price index (CPI), which encompasses the price of a normal, weighted basket of goods and services purchased by households in the nation. Another economic issue is that of unemployment, which consists of†¦show more content†¦Contrastingly, the negative implications include: increased pollution; growth in urban centers; and the financial benefits of this growth may not be equally distributed amongst the population, thereby worsening the prev alence of inequality in the distribution of income and wealth. Moreover, economic growth is measured by the following equation: Economic growth is caused by an increase in aggregate supply, and a rise in aggregate demand. This was evident during the peak of the mining and commodities boom during 2011-2012, during which Australia’s economic growth was relatively high at approximately 4.5% in comparison to that of other advanced economies post the downturn of the 2008 GFC. Effects of Economic Growth Economic growth is the most important objective for economic management. Economic growth makes it possible to achieve goals and also causes problems. The following are its effects: Living standards: Fast economic growth allows an increase in real GDP per capita. Real wages can rise and households can enjoy a higher disposable income, which positively means there will be higher material living standards. Employment: Economic growth positively produces more jobs and a strong level of economic growth can help individuals who are willing to find employment. CountriesShow MoreRelatedEconomics Is All About The Allocation, Unemployment, Economic Growth And The Value Of The Dollar1487 Words   |  6 Pageshave a thriving world. Economics is all about the allocation resources and choices individuals, businesses and governments make. Economics decides how much goods and services are bought and sold for, how many people have jobs, how much a currency is worth and much much more. 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