EACH ANSWER MUST BE OF 500 WORDS,THEY MUST BE MOSTLY RELATED WITH AN AUSTRALIAN ECONOMY.

Answer to 1:
With nominal GDP at around 1.6 trillion in terms of U.S dollar, the Australian economy (in terms
of nominal GDP) is thirteenth largest economy in the world. Initially the economy focused on the
production of primary products but today the economy is dominated by service sector with
contribution of about 70% in the GDP. Australia is characterized as resource abundant economy
and has large reserves of iron ore, renewable natural resources, copper, natural gas, coals and
uranium. The strong and rapid development of Australian manufacturing and agricultural
industries, hence, so far can be attributed to its richness in terms of resources. Having abundance
in minerals and natural resources has allowed Australia to operate as a global supplier of
esources and thereby has made the Australian economy to be immune to any global crisis
(particularly economic crisis). Although service sector contributes more than 70% of the total
Australian GDP, yet its economic growth is largely and significantly dependent on its mining,
agriculture and manufacturing sector.
Considering the overall growth pattern (so far) of Australian economy, then
we note that Australian economy is a Multi-Speed economy i.e. different sectors have different
growth rates or speed of growth. According to some (for example, ABC news), Australia is 3-
speed economy while other say that it is 2-speed economy but any ways, it can be characterized
as multi-speed economy. The case of Multi-Speed arises when we compare growth across
different sectors, particularly mining and non-mining sectors. Since the inception, due to large
esource base, the mining sector has been a highly growth intensive and very strong sector of the
Australian economy. The Australian mining and resource sector cu
ently accounts for about
17% of total GDP. Although mining sector employs relatively less labor force (2.75%, as per
ABS) but the mining sector has been the engine of economic growth for Australia in recent years
as much of the economic growth during 2010 and 2011 can be attributed to high growth of
mining sector. In 2010, the Australian economy grew by 2.3% and during the same period,
mining activities expanded by 12% (source, RBA) and therefore much of the growth of GDP can
e attributed to mining sector.
Non-mining sectors (such as manufacturing, agriculture), on the other
hand, are growing at much slower pace and productivity has been moderating in these sectors.
Although these sectors account much larger share of total GDP in Australia but due to very slow
growth, their contribution in overall GDP growth has been quite low. There are many reasons for
these growth differentials (internal and external factors). 1. The different economic and social
conditions (in terms of geography, culture, resource abundance, political stature etc.) across
egions are the main reasons for growth differential across sectors. 2. The mining and mineral
sector has been performing well due to its strong demand from emerging countries like China
and India. These countries, due to their large requirement for resources, import iron ore, steel,
coal and other minerals etc. from Australia and thereby contributes in the growth rate of
Australian mining sector. 3. The other reason for slowdown in non-mining sector of Australian is
global slowdown and co
esponding appreciation of Australian dollar. The Australian dollar
today is considered to be very expensive with respect to most major cu
ency. This has increased
the price of Australian product in the world market and therefore has caused Australian non-
mining exports to fall. 4. The difference in productivity across different sectors could also be one
of the reasons for growth differentials.
Moreover, it is expected that the mining sector will continue to show good
performance and will continue to be an important sector in overall economic growth of
Australian economy; for the period 2011-2016, the iron ore production in Australia is expected
to grow by 8.26%, with the production of iron core rising from 465 million tons in 2011 to 706.9
million tons in 2016. The coal production output is also expected to grow by 6.5% over this
forecast period, with production increasing from 405mtpa in 2011 to 561mtpa in 2016. This high
growth of mining sector is expected to continue despite the proposed tax on miners such as,
Ca
on tax and MRRT etc. as implied by the fact that the proposed tax has not affected new
investment in Australian mining industry, since many new iron and coal mining projects were
announced in the country after the proposal of such taxes. Given this fact, the phenomenon of
multi-Speed economy for Australian economy might continue if no impetus/support is provided
to non-mining sector of the economy....