Topics: Foreign exchange market, United States dollar, Macroeconomics Pages: 4 (1499 words) Published: January 5, 2014
Assignment 2 for TECO401 the Principle of Economics

With the development of economic globalization and technology innovations, the global economic is affected by different aspects. Specially on the currency market and international exchange rate, which is depends on gross domestic product(GDP) as well as the inflation rate, interest rate, bond market, labor market, etc. Even the unemployment rate can be results on the changes of the currency market. Based on the article: US jobs data pressure Aussie dollar, it is argued that, the macroeconomics theory will analyze and explain the exchange rate between US and Australia. Three major parts used from macroeconomics theory will be discussed which are: gross domestic product(GDP) structure, unemployment rate between US and Australia, globalized bond market .

The term GDP which refers to gross domestic product is a subject in macroeconomic that explain the market value of final goods and services produced in a country in a given period of time. In other words, it is the total value which a country produced in a year. So GDP is a scale to compare different countries' activities in the one year period. In the article "US jobs data pressure Aussie dollar", it indicated that good economic data in US showing improvement in employment conditions and consumer and business confidence. On the other side, Australian dollar has slipped against US dollar amid a better outlook for US economy. In results, US dollar has stronger buying power in the world market, so it is a good sign for US to gain further advantages in export and import. In the structure GDP, production is equals to expenditure and equals to income. The more a country produced equal to the more it spend and gained on income. During the financial crisis begins in USA since last year, US government pushes a lot on the international business and trading, create lots of job opportunities for the local people which results the increase on domestics productions and...

References: Fischer, S. (1993). The role of macroeconomic factors in growth. Journal of monetary economics, 32(3), 485-512.
Kohli, U. (2006). Real GDP, Real GDI and trading gains: Canada, 1981-2005. International Productivity Monitor, 46-56.
Kuznets, S. (1934). Congress commissioned Kuznets to create a system that would measure the nation 's productivity in order to better understand how to tackle the Great Depression. National Income, 1929–1932, 5-7.
O 'Sullivan, A., & Sheffrin, S. M. (2003). Economics: Principles in action. New Jersey: Pearson Prentice Hall.
Pettinger, T. (2011). Unemployment and Exchange Rate. Economics.
Stein, P. (2011). 'Dim Sum Bonds ' on the Menu for Foreign Investors. The Wall Street Journal.
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