Economic Principles Issues - Essay Example

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Economic Principle Table of Data   Australia USA Qatar Total population  23,298,022  313900000  2051000 GDP/capita 23945.72 USD  49965.27 USD  102700 Labour force  11639200  154839000  1320000 % of population working in agriculture  3.3  0.7  2.3% % of population working in industry  21.6  20  51.8% % of population working in service  75.1  79.3  45.7% % of population living below the poverty line  12.5  14.8  0% Exports commodities  coal, crude petroleum, copper, liquefied natural gas, iron ore, meat, gold, wool, wheat, alumina   Industrial Supplies, automotive vehicles, Consumer goods, capital goods Capital Goods and components Food and beverages  Liquefied Natural Gas Petroleum products fertilizers steel Exports in $  $263.9 billion  $1.56 trillion  104.3 billion Export partners by %  China 29.5% Japan 19.3% South Korea 8.0% India 4.9%  Canada 19% Mexico 14% China 7% Japan 4.5%  Japan 26.6 South Korea 19 India 12 Singapore 5.7 China 5.4 Imports commodities  Machinery and transport equipment, telecommunications equipment and parts; computers and office machines, petroleum products and crude oil  Consumer goods, industrial supplies crude oil and components, computers and accessories, automotive vehicles, food, and beverages  Machinery and transport equipments food chemical Imports in $ $258.1 billion   $2.3 trillion  25.33 billion Import partners by %  China 18.2% United States 11.6% Japan 7.8% Singapore 5.9% Germany 4.6% Thailand 4.2% South Korea 4.0%  China 19% Canada 14% Mexico 12% Japan 6.4% Germany 4.7%   US 14.2 % UAE 11% Saudi Arabia 8.3% UK 6.4% Japan 6 % China 4.8% Source: Unicef, 2013 Answer 1 The percentage of population who are in the labour force has been calculated by taking the total population and the number of people in the workforce. While both in US as well as in Australia the rates of participation in the labour force are 49% for each of the countries with the rate at Australia little higher than that of the United States for Quarter the figure is much higher at 64% (Australian Bureau of Statistics, 2013). Answer 2 In case of all the three countries it has been noticed that the percentage of population in the agriculture is extremely low. This is a special characteristic of all the developed nations. As the countries move from the different stages of development the sectoral contributions of these countries would vary at each stage. This means that an underdeveloped country would have the majority of the population engaged in the agriculture. On the other hand the developing countries which have crossed the initial stage of development would have industry as the main contributor to the GDP and the maximum participation of the labour force would be in that sector. Finally the most developed countries of the world would have the maximum percentage of people working in the services sector. Thus the high percentage of people engaged in the services sector of USA and Australia, which are 79% and 75% respectively, would prove that these countries are more developed. On the other hand in case of Qatar the percentage of people in the services sector is only 45% while the industrial sector constitutes the major part of the population. Therefore Qatar can be claimed as comparatively less developed than the countries like Australia and the USA. Answer 3 The list of exports of Australia compared to that of Qatar is much longer. This is because the country does not have any agricultural produce and therefore it cannot export any agricultural goods to any other country. Petroleum and related products are the main sources of income of the economy of Qatar and the main sources of government revenue and accounts for more than 60% of the GDP of the country. Thus the resources that the Qatar Economy is endowed with are restricted to the industry and the services sector only. Even the contribution of the services sector is limited to 20% only. On the other hand, the Australian economy exports products and services that comprise of all the sectors of the economy. Answer 4 The main motive of international trade is to gain out of the competitive advantage that an economy has over the other economies. A country would export that commodity in which it has competitive advantage compared to the country with which it is trading. Thus Qatar has a competitive advantage in petroleum because the country is rich in the petroleum resources as compared to the other countries like USA and Australia. The economy of USA would again export the capital and manufacturing goods because it specialises in that. Now it is found that some goods like petroleum product is in both lists of exports and imports in case of Australia. Both export and import is conducted for the same product with a definite motive. A country may be rich in a particular resource and may have adequate knowhow to manufacture a product. But importing the same product from the foreign markets would provide the consumers in the nation with a lot of variety. Along with that it is essential to encourage competition in the domestic market (Samuelson and ? Nordhaus, 2010). This would be possible only when the imported goods are sold in the same market as the domestic products. This competition would help in the improvement of the quality of product. As a result of this any kind of monopolistic market scenario would be removed. On the other hand the country may export a good in which it may not have competitive advantage, only to maintain a place in the global markets. This would help the country to make an international presence. Answer 5 The sum of the exports and imports as well as the difference between the exports and imports has been shown in the following table. Sum of Exports and Imports (billion $) 522 386 129.63 Net Exports (billion $) 5.8 -74 78.97 The sum of the export and the import figures provide the volume of transactions that take place in the economy. A high sum of export and import figure would tell that the countries are more open in nature. Thus from the figure it is clear that the Australian economy is a more open economy as compared to that of the Qatar economy. The sum of the exports and imports for Australia is five times that of Qatar. On the other hand, the balance of trade for all the countries has been calculated and it is seen that it is positive for Australia and Qatar. On the other hand, the net exports in negative for US. A positive trade balance would mean that the amount of exports is more than the amount of imports. This means that foreign currency would flow more into the country. On the other hand a negative trade balance would have other implications (Anderton, 2009). It would mean that the domestic currency would be going out of the economy. This would have an adverse effect on the BOP position and the economic production of the country would suffer a setback. Answer 6 Positives of Australia The positive aspect aspects of the Australian Economy are that the country has a positive trade balance. The country can be claimed as a very open economy considering the huge volume of export and imports that the country undertakes. Negatives of Australia The per capita GDP of Australia is lowest among all of these countries. This has a negative implication from the societal point of view because the average standard of living which is often measured partially in relation to the GDP is lowest among the three countries. The labour force participation rate is also lower compared to that of Qatar. Positive of USA The US economy being a market driven economy has a lot of scope to prosper. The country is at a very advanced stage of development and is engaged in the export of technology which has helped the country to fight the other technology oriented economies like China and Japan. The products manufactured in the US are also gaining popularity in the international markets. Negatives of USA USA is facing adverse effects of the high rates of unemployment at the present day. Along with this a negative trade balance has led to deterioration in the current account deficit of the country which in turn has case a reduction in the value of dollars compared to the other currency. Positive of Qatar The labour force participation rate in the country is quite high. Along with that the number of people below poverty line for this country is also low. The country has huge petroleum resources which has helped the country to gain a considerable competitive advantage in this sector compared to the other countries of the world (Colander and Gamber, 2006). The per capita income of the country is also quite high compared to US and Australia. Negatives of Qatar The negative aspects of this economy are that the country does not have any scope in the agricultural sector. Since the major area of prosperity in the country is oil, the trade of the country chiefly depends on the exports of petroleum and the import of other necessary products. The trade balance is high for the country only for the reason that the exports is mainly of oil. From the point of view of all the economic indicators the above analysis proves that the Australian Economy is the best among these three. References Unicef, 2013. At a glance: Qatar: Statistics. Retrieved from: http://www.unicef.org/infobycountry/qatar_statistics.html#104 Anderton, A. (2009). Economics: A Level Student Book. London: Pearson Education. Colander, D.C. and Gamber, E. (2006). Macroeconomics. Cape Town: Prentice Hall. Samuelson, P.A. and ? Nordhaus, W.D. (2010). Economics. New Delhi: Tata McGraw-Hill Education. Australian Bureau of Statistics, 2013. Population Clock. Retrieved from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Web+Pages/Population+Clock?opendocument#from-banner=LN Read More