GLOBAL ECONOMIC - Assignment Example

Global economy Global economy BUSINESS SCHOOL- LEVEL ONE STUDY Question Refer to the line chart below and discuss the possible economic reasons for those differences between the five countries The GDP per capita shows the quality of living of the people in a country and is given by dividing the GDP with the population in the country (Spilsbury, 2012). This explains why the GDP of China is high but when the GDP per capita is considered it is low, due to the fact that it has the highest population in the world.

The population in UK and Australia is low allowing for them to have a high level of GDP per capita while that of Russia and Indonesia having the constant amount of population that gives the GDP and GDP per capita the same impacts in their economic potential. The other reason for the difference s in GDP per capita is differences in productivity among countries with the level of productivity in a country being depicted by high GDP per capita symbolized by Australia and UK in the chart above. China, Indonesia, and Russia have the same level of labour productivity explaining the similarity in GDP per capita.

The other reason that could be the cause for the differences in the GDP per capita is the working hours of the workers in the given countries with the country that has the highest GDP per capita having high working hours compared to the other countries. Australian and UK could have high working hours compared to the working hours in China, Russia, and Indonesia depicting the difference in GDP per capita in the graph. Question 2: Refer to the line chart below and discuss the possible economic reasons for those differences between the five countries Four reasons can explain the differences between the GDP of the five countries including amount of physical resources, quality and quantity of human resource, the size of the workforce, and the technology level (WORLD BANK, 2013).

China could have been increasing the amount of physical capital, promoting highly skilled and trained human resource, increasing workforce size, and advancing technology from 1994 to 2012 as depicted by the rise in GDP over the years. The size of workforce, advancement in technology, training and equipping the human resource, and amount of physical resources seems to have been almost constant in Indonesia, Australia, and Russia due to the slight changes in GDP growth from 1994 to 2012. There are, however slight positive changes in skills, technology, workforce, and physical resources in UK showed by the increase from 1994 to 2007, but these factors may have slightly fallen to result in the down ward trend in the GDP in UK from 2001 to 2012.

Question 3: Refer to the line chart below and discuss the possible economic reasons for those differences between the five countries The possible economic effects for the differences in the GDP growth are three including the quality of governance, which are the mechanisms and institutions that aid in decision-making and authority dispensation in a country (Ocampo et al., 2007). Governance ensures the provision of social environment and necessary infrastructure for economic development. The second reason for the difference in GDP growth is technology progress, which has been referred to as the engine of economic growth including labour saving, capital saving, and neutral technology.

Technology adoption speeds and diverting it to productivity by these countries influences the economic potential and growth of these five countries with the difference in adoption rates signified by the difference in growth rate. The third reason for the GDP growth is population growth that has both negative and positive effects on economic growth due to the effect on aggregate demand, pressure on amenities, and supply of labour and skills. Different population policy, growth speed, and age structure impact on GDP growth among countries.

The difference in governance, technology progress, and population are the reasons for the difference in GDP growth among the five countries. Question 4: Refer to the line chart below and discuss the possible economic reasons for those differences between the five countriesThe reasons behind the inflation rates differences in countries include openness, government policy distortions, and political stability, considering optimal taxes for the country, and the need for convergence in the price levels (Organization for economic co-operation and development, 2007).

The main aim of the five countries is to maintain low levels of inflation and consumer price index as depicted by the graph with the levels of inflation in China, Australia, Indonesia, and UK having been low throughout through the maintenance of openness, government policy, and convergence in prices consistent with the maintenance of low inflation rates (Maynard, 2007). The need for convergence may have led to the falling of inflation rates in Russia from 1994 to 2002 and maintaining a constant inflation rate thereafter.

Question 5: Refer to the line chart below and discuss the possible economic reasons for those differences between the five countriesThe main reason for the differences in unemployment rates between the five countries includes the differences in the state of development of infrastructure and economies in these countries and the amount of the total labour force that has a direct correlation with the population on the country over the 1994 to 2012 period. The other reason for the differences include the aid packages available for the unemployed in these countries which differ in every country with a country that offer good packages for the unemployed in terms of financial compensation having a high amount of unemployment rate.

This is evidenced by the increase in unemployment in the UK between 2008 and 2012 owing to increased benefits for the unemployed. The chart shows that in 1994, there was a lot of disparity in the infrastructure development of the five countries and the amount of total labour force in relation with the population but these have been reduced over time as shown by the decreased differences in unemployment rates between the countries by 2012. Question 6: Why you might want to use more than one chart to present variables in the above five questions?

Presenting the variables in the above questions in more than one chart allows for the analysis of the trends on inflation, GDP per capita, GDP growth, inflation, consumer prices, and unemployment in a specific country. This will be possible through the analysis of the variables change over time to compare the amount of inflation, consumer prices, GDP per capita, GDP growth, and unemployment against the corresponding year generating the trend to map changes in the economic conditions of the country as represented by these factors.

Using more than one chart also makes the work tidy and gives the specifics of a country for individual country consideration. ReferencesWORLD BANK. (2013). Measuring the real size of the worlds economy: the framework, methodology, and results of the International Comparison Program--ICP. Washington, DC, World Bank.ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. (2007). Education at a glance 2007: OECD indicators. Paris, OECD.OCAMPO, J. A., JOMO K. S., & VOS, R. (2007). Growth divergences: explaining differences in economic performance.

India, Orient Longman Private Ltd.MAYNARD, J.-P. (2007). A comparison of GDP per capita in Canada and the United States from 1994 to 2005. Ottawa, Micro-Economic Analysis Division, Statistics Canada.SPILSBURY, R. (2012). Global economy. Chicago, Ill, Heinemann Library.