Introduction to Economic policies

Economic policies played a significant role in the growth and development of the country. There are various microeconomic factors which can influenced of a nation wage earners, businesses and economic growth. The present research report is related with the Australian government economic policies which can improving its position at the domestic as well as the global level (Iossa, and Martimort, 2015). There are various economic principles which can be used by the government in order to increase wage rate, economic growth and make a sound business environment within the country.

ECONOMIC PRINCIPLES

Standard of living depends on country's production:

This is one of the major principles of economics which is relate the standard of living with the production of goods and services. For example the average income of an individual in US is approx. $35000, in Mexico citizen income is approx. $18000 whereas Kenya citizen is approx. $1000 (Gómez-Baggethun,and et. al., 2010). This large variation in average income is reflected in various measures of the quality of life. Citizens of high-income countries have more TV sets, more cars, better nutrition, better healthcare, and a longer life expectancy than citizens of low-income countries. Changes in the living of standards over a time period are too large. For an example, income of US citizen was grown up by 3 percent per annum in the last past decades. The main reason for this is the various economic policies such as minimum wage rate which can help to increase living of standards and consumption. Therefore, Australian government required that to use such polices which can help improve per capita income of an individual which can leads to increase in the standard of living and also increase in the demand of good and services in the economy (Einav, and Levin, 2014).

Markets are usually a good way to organize economic activity

Markets are usually ups and downs because of some sudden actives and news so it can easy to affect on market economy or country economy . Market economy of Australia that affect because allocate all resources through the decentralisation decisions of many firms and households they are interact in the market and they are dealing in the market .In the other hand market can change time to time by changes in share rates and economy of the country (Einav, and Levin, 2014).

Market prices are reflect both the value of products or goods to customers and the cost of resource those are use for manufacture products , every country wants to develop our countries economy and also develop standard of living of every persons of the country so Australia also want to develop country to abolish current minimum wages. market economy is the important resources are owned and controlled by individual person and government of that particular country so market prices can change market transactions by the interaction of supply and demand of goods or products to the customers. Economic development in a market economy is determined by related to market risk and reward or profit that decide a particular activities present to individuals . If risk are too high so profit become too low in this case country economy down , so market changes and prices should be increasing not going in down side because that affect in negative manner for that particular country (Safarzyńska, 2013). For example, If a country invest in foreign market not in own market so in this case our country's currency become down compare to other country so all countries are invite foreign customers to invest money that particular countries market than they can easy to grow countries economy and also they are maximum invite customers for FDI and FII . In the other hand, market is the good way to develop economy of the country and market ups and downs through country become in surplus and deficit.

Government can sometimes improve market outcomes:

Government policy can be most useful for country and economy development at this time have to decide how to maintain situation in Australia for current wages. Government is the broad reason to interface with the economy because government have rights to control system and activities of the market. In the market various kinds of situations are develop like market failure in this case government make some special rule to manage problems and issues for country, market failure means in this time market left on  its own allocate resources efficiently. Next situation is externality, it means that happens by the persons daily activities so it can also affect the economy so in this situation develop some rules and regulations to control that rues have to follow by the all persons of that particulars countries (Flanagan, Uyarraand Laranja, 2011). And then last one is market power , this is the ability of any particular economic actor that can be small of actors and large that have to substantial influence on market prices and economy development of Australian country. So Australia government have to follow all rules and regulation and should determine customers needs and wants then take decisions on any particular situation and also take decision on the current wages for the employees of an business . Government enforce the regulations and protection the centres that support these property and assets rights . If the rights of products are not protected by the government so in this case make uncontrollable situation in the country. First have to consider the goal of efficiency. Although hand mostly l;leads in the market to provide resources efficiency, this is not always the same case. So government can improve the on market outcomes but it is not possible always . Sometimes policies are designed simply to take profit the political power. Sometimes they are choose that particular well intentioned leader for the country who are not properly informed (Forrester, 2013).

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Trade can make everyone better off:

According to this principle trade allows every country that they will specialize according to their relative advantage and they will enjoy maximum variety of services and good. This principle says that trade allows every person to specialize at what he/she does best like it is farming, home building or sewing. We can relate this with nation or country like in the same way country can specialized in what they can do best. Country will get more benefits with the low prices. Trade is not like that one wins and the other one loses. In fact it allows to specialize in what you do best (Iossa, and Martimort, 2015).

American and Japanese firm are competitors to each others because they both are producing same products. Like this Apple & Sony, Toyota & Ford are competitors to each others. If two countries trade with each other then it can make both countries better and also help in development of employment opportunities. It will also help to build economic growth.

We can also see the trade effects in families. In families, choice or taste is different or varied. When they go for shopping they compete against other family because each family want to get or purchase best product or service in the lower prices. Also the compete with the jobs. So, we also can say that every family competing with all other families (Gómez-Baggethun,and et. al., 2010).

If families or country trade with others then they always want best variety of products or goods and services at the lower prices. Both countries and families want to get benefit when they trade with others. They always want the great variety of products and services.

If country trade with other countries than it is must to follow law of the country. They can't breach otherwise they will responsible.

Society Faces a Short-Run Trade off Between Inflation and Unemployment:

This principle says that if prices reach to the higher level, in long run then it effects the money. But short run is more complex compare to long run. In short run, if there is an increment of money then it will affect the level of spending as well as demand for any products and services. If demand of any product or services get high then it will affect the prices of that product, it will increase due to increase of demand. But same time it encourages their production of goods and services they produce and helps in reduce unemployment because if there is more production then they need to hire more workers (Einav, and Levin, 2014). And more hiring means less unemployment. Short run means there is a problem of one or two years. Many economists say that unemployment and inflation is opposite to each other, but it is not true. They run together. Inflation and unemployment both are closely related to each other. Relationship between them pull the attention of most economists. Best way to understand the relationship between them is seen that how the thinking about it is evolved.

The short run trade off play an crucial role in analysis of business cycle. If there is unforeseeable variation in economic activity then it is measured by the number of production of products and services or through the number of people employed (Safarzyńska, 2013).

Economic Growth

If there is any changes in what the government spends, amount of taxes that paid, then it will make an impact on combination of inflation and unemployment. Because all of these are so important factors that affect the inflation rate of the economy and unemployment of any country (Flanagan,Uyarraand Laranja, 2011).

CONCLUSION

As per the above mentioned report it has been concluded that the role of economic polices and legislation is too essential in the economy. In this report our online assignment writing experts has discussed about the various economic principles which can includes country production- standard of living, trade-off between inflation and unemployment in short run, trade promotion, organizing trade economies, government decision making to promote efficiency and equity in the market which can provide stable growth rate and good wage rate to the country.

REFERENCES

  • Iossa, E. and Martimort, D., 2015. The simple microeconomics of public‐private partnerships. Journal of Public Economic Theory. 17(1). pp.4-48.
  • Gómez-Baggethun, E., and et. al., 2010. The history of ecosystem services in economic theory and practice: from early notions to markets and payment schemes. Ecological economics. 69(6). pp.1209-1218.
  • Einav, L. and Levin, J., 2014. The data revolution and economic analysis. Innovation Policy and the Economy. 14(1). pp.1-24.
  • Safarzyńska, K., 2013. Evolutionary-economic policies for sustainable consumption. Ecological Economics. 90. pp.187-195.
  • Flanagan, K., Uyarra, E. and Laranja, M., 2011. Reconceptualising the ‘policy mix’for innovation. Research policy. 40(5). pp.702-713.
  • Forrester, J.W., 2013. Economic theory for the new millennium. 2003. System Dynamics Review. 29(1). pp.26-41.
  • Kamada, Y. and Kojima, F., 2014. Voter preferences, polarization, and electoral policies. American Economic Journal: Microeconomics. 6(4). pp.203-236.
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