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1. Where in the business cycle do you think Australia currently sits? Justify your assessment?
During expansion phases of the business cycle there is a rapid economic growth: the economy is booming (Norris & Sloman, 2008). In Australia the last recession occurred in 1991-92 (Ibid, 2008). In recent years, China and India’s insatiable demand for iron ore, coal, uranium and other commodities, including wheat, cotton and wool, leading to unprecedented volumes of trade (Shameen, 2008). Plugged into it Asian neighborhood, the Australian economy continues to grow at 3.9 per cent-one per cent higher than the OECO average (Ibid, 2008). It is clearly that the country’s economy experiences a boom.

However, the risk of a hard landing for the economy in 2009 is on the rise. Australia is forecasted to experiences a ‘peaking out’. During the Peaking out phases of the business cycle, growth slow down or even ceases (Norris & Sloman, 2008). The Economist Intelligence Unit has downgraded its forecast for real economic growth in Australia to 2.9% (from 3.1% previously) in 2008 and to 2.5% (2.7% previously) in 2009 (Rich, 2008). Despite healthy employment and wage increases, and repeated tax cuts, high interest rates will cool consumption growth in 2008-09 (Shameen, 2008). Furthermore, there will be a slowdown in investment growth from the rate recorded in 2007 as tighter credit conditions dampen appetite in some sectors (Rich, 2008). So while Australian economic growth is strong for now, there is a growing risk of a hard landing in 2009.

2. Over the last decade Australia has experienced a long period of economic growth. What have been the implications of this growth for the tourism and hospitality industries in 2007 and early 2008?
The Australian economy has grown robustly over the past six years. The household final consumption expenditure per capita rose from $10,400 in 1960–61 to $26,100 in 2005–06 (Australian Bureau of Statistics, 2007). Rising real income has the potential to alter consumption patterns by boosting real spending on discretionary goods and services (wants) more strongly than on basic goods and services (needs) (Norris & Sloman, 2008). The higher disposable income will encourage Australian to travel more.

What is more, the biggest single explanator for economic growth in Australia is the rapid rise in population. The preliminary estimated resident population (ERP) of Australia at 30 September 2007 was 21,097,100 persons. This was an increase of 318,500 persons (1.5%) since 30 September 2006 (Australian Bureau of Statistics, 2008). A fast growing population will, leading to a rapidly labour force which will benefit tourism and hospitality industries by expanding employment and its associated output (Dowrich, 1999).

On the other hand, the rapid growth of economy may cause some negative effect for Australia tourism and hospitality industries as well. For example, the higher rates of interest will lead to a fall in consumer spending, and the high inflation will increase uncertainty of business investment decision.

Week 8

1. Can you explain why cyclical unemployed people become long term unemployed when the economy recovers?
During the upturn phase, a stagnant economy begins to recover and growth in actual output resumes (Norris & Sloman, 2008). A rapid rise in aggregate demand will create shortages (Ibid, 2008). This will tend to stimulate firms 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。