BUS102 – Economics Assignment – Case Study Topic: In week 10, an area where economic reform has been proposed will be chosen. The topic will be discussed in class to ensure it is suitable. Your task...

Management
ECONOMIC REFORMS
2017
Management
Paper
Economics
M A N A G E M E N T
INTERNATIONAL TRADE AND FINANCE (ITF)
This paper is based on topic economic reform which took place in the field of international
trade & finance in Australia. In this paper different aspect of this economic reform such as
outline of reform proposal, theoretical and empirical rationale for this reform, impact upon
aggregate output & income, impacts upon unemployment, inequality & poverty, likely
environmental impacts and weighing different kinds of impacts with respects to
ecommendations have been explained in a detail manner. International trade and finance in
Australia has been supporting its economy to grow and uplift the living standards of
citizens(Wagner J, 2007).
Outline of Reform Proposal
The reform proposal related to international trade and finance is very important and linked
with different kinds of concepts such as trade patterns of Australia, demonstrating benefits of
trade systems to citizens, making difference related to absolute costs and comparative kind of
advantages, defining terms such as fair trade & protectionism, clarifying about balance of
payment systems and explaining about exchange rates of different countries cu
encies. The
international trade patterns of Australia reflect that 50% of its commodities are coal, iron and
auxites which are exported to different countries and it imports trucks, petroleum products
and clothing. It is gaining different kinds of benefits from trade by generating employment
and growing its economy with more financial resources. The absolute cost in Australia
eflects the ratio of 2 agricultural products equals to 1 electronic costs of equipment.
Australia has been enjoying comparative advantage in agricultural products. Free trade is
supporting to grow economy of Australia and protectionism is supporting the local
manufacturers from international competition. The balance of payment system of Australia is
negative which should that government have been spending more income(Feenstra, R,
1999). The forex market decides about exchange rates of Australian dollars whether it
gets appreciated or depreciated.
Theoretical and empirical Rationale for the reform
The theoretical rationale for this reform reflects that international trade and finance of
Australia is 50% exporting its commodities such as (iron ores, bauxites, beef, coals grains
and etc. It has been importing from different countries such as United States, Europe and
Asia to 89%. The imports are in-form of cars, petroleum products, clothes, machineries and
trucks. The empirical reform has been demonstrated with respect to different pie-charts which
demonstrate export and import systems of Australia with different countries. The empirical
ational behind this reform is show how trade theories have been linked with different aspects
of finance with Australian economy. The empirical study reflects that how close financial
development of Australia is linked with exporting countries such as china, India, Tiwan,
Japan, Hongkong and European nations. International trade is creating innovation in
Australia which is helping foreign investors to invest more in its development through
tourism, setting up new industries, export...