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 polity actions that are aimed at boosting the growth rate of the countrys economy (BBC, 2013). Chinas economy is the second-largest economy in the world. Currently, the countrys GDP has been estimated to be $12.38 zillion (according to the 2012 estimate) (CIA, 2013). However, recently the growth rate of the economy has slowed down significantly. After noting the declining death penalty level of the economy for the away few months, government has adopted certain policy prescriptions to improve the health of the economy. This paper discusses the main causes that lead to this issue and the level and pattern of impact that the paradox casts on Chinese economy and society. The aggregate contend 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 financial policy to improve investment climate in the ec onomy and has increased level of public spending in order to increase domestic require 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 article on BBC highlights two study concerns over the declining growth rate of the Chinese economy. Firstly, the economy has been heavily dependent on the export of various commodities and the major exports markets for the country are the ground forces 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 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 portion of the global output. Although accord ing to the International Monetary Fund, Chinese contribution 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 long 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 serious financial crunch and their import demand decreased. Therefore, the Chinese economy experienced a red ink of in export market. This had a major impact on the economy and its performance. Since the exports in the Chinese economy weakened, different sectors in the economy slowed down their proceeds 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,