Macro & Micro economics Essay Example | Topics and Well Written Essays - 1500 words

Macro & Micro economics - Essay ExampleThe report also comments on the Government of Chinas indemnity actions that be aimed at boosting the growth rate of the democracys economy (BBC, 2013). Chinas economy is the second-largest economy in the world. Currently, the orbits GDP has been estimated to be $12.38 trillion (according to the 2012 estimate) (CIA, 2013). However, recently the growth rate of the economy has slowed down significantly. later on noting the declining performance level of the economy for the past few months, government has adopted certain policy prescriptions to repair the health of the economy. This paper discusses the main causes that lead to this restoration and the level and pattern of impact that the problem casts on Chinese economy and society. The aggregate demand as well as the supply of goods and services in the economy is affected by this change in growth rate. The government is following expansionary monetary policy to improve investment climate in the economy and has increased level of public spending in order to increase domestic demand in the economy. Discussion on the economic problem issue China has depicted soft growth momentum in the first quarter (BBC, 2013) of 2013. ... Causes of the problem The denomination on BBC highlights two major concerns over the declining growth rate of the Chinese economy. Firstly, the economy has been heavily mutualist on the export of various commodities and the major exports markets for the country are the USA and the European countries. The major items exported by the country are transport equipments, garments, accessories, toys, plastic products, machinery, rubber, textile, metallurgical products, Chemical products, fuel materials such as crude oil oil and refined oil, and food items (Peopledaily, 2001). China follows an export led growth and it has remained the largest contributor to the output of the global economy and accounts for nearly 3 percent of the global output. Although a ccording to the International Monetary Fund, Chinese persona to the global output is set to exceed that of USA, Germany and Japan some economists have claimed in the past that the country would not be able to sustain its growth rate on the basis of exports for a enormous time. After the financial crisis of 2009 that had hit the USA and the European countries hard, economic growth in these countries slowed down. These countries faced life-threatening financial crunch and their import demand diminish. Therefore, the Chinese economy experienced a loss of in export market. This had a major impact on the economy and its performance. Since the exports in the Chinese economy weakened, divers(prenominal) sectors in the economy slowed down their production rates and the total output in the economy decreased that is reflected in the countrys gross domestic product. The constant sluggishness of economic performance in these advanced countries,