This website uses cookies to ensure you have the best experience. Learn more

Analysis Of Inflation (Based On Australia)

3524 words - 14 pages

Inflation can be defined as a "sustained increase in the general level of prices in an economy." Like unemployment, inflation is a major issue in economics, closely related to the fluctuating level of economic activity in a region. In Australia, the Reserve Bank of Australia (RBA) attempts to keep the inflation rate in the targeted range of between 2% and 3%.Economists generally recognise four main causes of inflation: demand, cost, imported and inflationary expectations. In Australia, the average annual rate of inflation in the past 40 years has been at 5.9%, where a good purchased in 1966 for one Australian dollar will now cost ten times as much ($1 $9.94 - measured using the Consumer Price Index (CPI) method).MEASURING INFLATIONThere are many measures of inflation, depending on which basket of goods and services are used as the basis for comparison. In Australia, the best known and most widely used measure is the Consumer Price Index (CPI).Consumer Price IndexThe CIP is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers; and therefore reflect changes in the cost of living (thus considered by some a cost-of-living index). The measure allows an evaluation of the inflation in an economy, and includes a basket of products & services such as food, alcohol and tobacco, clothing and footwear, housing, health, transport, communication, recreation and education. Not all goods and services are included, but a wide selection is covered to reflect average household spending patterns and a good indication of the overall movement of prices and in the cost of living.The inflation rate can be calculated using the following equation:Inflation rate (%)=(Current CPI Index-Previous CPI Index)/(Previous CPI Index) × 100/1Similar to New Zealand, Australia's Bureau of Statistics (ABS) calculates and publishes the CPI quarterly (every 3 months).The table below outlines the 2006 weighting of main expenditure groups in the CPI basket in Australia- source of data: Australia in the Global Economy textbook. Original source: ABS catalogue No 6440.Expenditure GroupWeighting FactorHousing19.75Food17.72Transportation15.25Recreation12.29Household furnishing, supplies and services8.09Alcohol and tobacco7.41Clothing and footwear5.19Health4.69Miscellaneous4.04Communication2.88Education2.69It can be clearly assumed that the dominant determinants of Australia's inflation are the industries of housing, food, transportation and recreation respectively. This also means that inflation will have significant impact on those sectors of the Australian economy. Australia's CPI is very similar to other developed nations. Below is a table representing the Canadian CPI weighing index on April 2006. Source: Canadian Bureau of Statistics (CBS).Expenditure GroupWeighting FactorHousing26.75Transportation19.79Food16.89Recreation11.96Household furnishing, supplies and services10.58Clothing and...

Find Another Essay On Analysis of inflation (based on Australia)

Analysis of sound application based on the film Se7en

1137 words - 5 pages of their sense of morality, and their consideration of the concept of justice and the meaning of life. As a profound movie, Se7en’s sound effect is exceptional too. This paper will examine some of the sounds that the film uses, and analyze the effect of the utilization of them. 2. Analysis of basic sound based on particular scenes 2.1 Beginning- gluttony At the beginning of the film, there is alarm for police cars and the speech sound of

Management report based on quantitative method of analysis

1248 words - 5 pages I/INTRODUCTIONThis report based on quantitative method of analysis to examine manufacturing figures and to find solutions to fulfil the contract at minimum cost.II/ANALYSED DETAILS1. Minimise the cost: How much to buy in - how much to produce?Both vats of type A and type B take 2 hours to dye a quantity of fibre that can eventually be turned sufficient fibre into yarn to make a metre of standard width cloth. We can choose between produce yarns

Analysis of the likely impacts of the 2003-04 Australian Federal Budget on Australia's economic growth, unemployment and inflation

1240 words - 5 pages 1. IntroductionThe government implements its macroeconomic policy using two main tools; fiscal policy and monetary policy. Government macroeconomic management is designed to minimise fluctuations in the business cycle so we can experience good growth, low rates inflation and relatively stable unemployment (Sloman, J. and Norris, K. 2002; . Fiscal policy refers to the government's choices regarding the overall level of government purchases or

The effects of inflation on the labor market

799 words - 3 pages inflation and the unemployment rate--has long been a mainstay of market and policy analysis of inflation in the United States. Macroeconomic forecasters and policymakers alike have relied on the Phillips curve to provide a reading of the likely path for inflation in the period ahead. In the past few years, however, the Phillips curve seems to have become less reliable. The unemployment rate has fallen in the 1990s, but the expected subsequent increase in

An examination of the article "Cladistic analysis of languages: Indo-European classification based on lexicostatistical data"

1242 words - 5 pages Cladistics is defined as "a classification scheme based on the historical sequence of divergence events (phylogeny); also used to identify a method of inferring phylogenies based on the presence of sheared derived characters (synapomorphies)" (Freeman, 2001). A paper was found on "cladistic analysis of languages: Indo-European classification based on lexicostatistical data," by examining this article a better understanding of how cladistical

Mindfulness and Decision Making: Analysis of a Popular Press Article Based on an Empirical

1072 words - 5 pages result in making "smarter" decisions. Bergland based this claim on a an empirical study conducted by Andrew Hafenbrack, Zoe Kinias, and Sigal Barsade, published in the peer-reviewed Journal of Psychological Science (2014). This article (Bergland, 2014) proposes that doing meditation prevents succumbing sunk cost bias, defined in the peer-reviewed article (Hafenbrack et al., 2014) as the propensity to continue and endeavor after money, time, or

An Analysis of Governmental Performance in Australia

896 words - 4 pages , suggesting that greater involvement from backbenchers in the investigation process and a general increase in the content of committee hearings and reports being taken seriously would be beneficial in making the scrutiny processes more comprehensive (Thomas 2009: 396). The article’s study is based on a selective analysis of estimate and annual reports, as well as committee proceedings and any other documents produced for the purposes of government

Analysis of Water Sustainability in Australia

1596 words - 6 pages Everything, which exists in the world, requires water. Nevertheless, a lot of different places face crucial problems, which arise as the result of the water shortage. There are approximately seven billion of people on our planet Earth. In fact, each of them requires a liter of water per day to live and thrive; however, many of them are currently facing immense shortitudes. Actually, Australia faces serious challenge in getting sustainability as

Impact of the Vietnam War on Australia

1008 words - 4 pages Social, Economic and Political Effects of the War.The controversial Vietnam War had a huge impact on Australian society in the 1960's/1970's. It affected all aspects of society, such as the social, economic and political issues. Vietnam was known as a 'TV War'. A lot of violent and gruesome footage of the war was broadcasted right into people's homes. People felt the need to report their own opinions and a very biased view of the war, they were

An analysis of the movie "Women of the sun" based on the life of the "Nyari People". Australian Aboriginals

1574 words - 6 pages something serious happened they knew how to uphold their laws.I do not believe that the intercultural contact that occurred in the 1800-1900's in Australia was based on considerations of cultural awareness and justice of aboriginals at all.The reason I believe this is because a while after Captain Cook founded Australia in 1788, Australia was dubbed "Terra Nullius" (see glossary) even though the explorers knew that the land was inhibited by aborigines

Cirrhosis: An Analysis of Evidence-Based Practice

729 words - 3 pages Cirrhosis: An Analysis of Evidence-Based Practice Characterized by progressive tissue injury and scarring, cirrhosis is among the leading causes of chronic liver failure in the United States. Recent research conducted by the National Institutes of Health indicated that the prevalence of cirrhosis, especially in clients diagnosed with Hepatitis C, has increased steadily throughout the past decade and will likely continue to increase in the

Similar Essays

Inflation And Effects On Australia Essay

1743 words - 7 pages can instil uncertainty in economic agents' view about economic conditions, which heightens inflationary expectations. It also distorts the pattern of allocation of resources by directing funds into speculative and unproductive investment (e.g. real estate) Our international competitiveness can also be eroded by high inflation as our higher priced products become less appealing to overseas buyers.In Australia, inflation is measured quarterly using

Cultural Analysis Of Australia

7230 words - 29 pages day become the national day of Australia. There was prisoner transportation from 1788 and ended in 1868 and there were almost 200,000 men and women prisoners in Australia at that time. The way that provided a hasty for many nations to come to Australia was the boom in the wool industry and the goal rushes in 1850s. Besides, the expansive of land, labor scarcity, and new prosperity based on mining and farming made Australia to be the land of

The Effect Of Commodity Prices On Inflation

2117 words - 9 pages study, such variables have been used as control variables and therefore the choice and the theory behind these variables are provided in the data and methodology section. This study is different to previous literature as it considers all three commodities in a single framework. This allows for the analysis of all three commodities for different countries and allows for one to see which commodity has the biggest influence on inflation for the countries considered. The literature has also shown the importance of including other indicators of inflation when analysing commodity prices and so they will also be included.

Analysis Of Unemployment (Based On The Australian Economy)

4476 words - 18 pages expansionary macroeconomic policies. This leads to a boost of the levels of aggregate demand and initiate economic activity. This is achieved through an increase in government spending, tax cuts and lower levels of interest rates.In Australia, the strategies used to tackle unemployment have been based on microeconomic reforms, creating a flexible labour force and removing regulations which may discourage businesses from employing workers. Policies