Description
Write 3 to 5 pages of analysis and additional pages of graphs and tables,analyzing macroeconomic variables of a country of your choosing.Be sure to pick a country for which there is readily available data(Indonesia). To complete this assignment you will need to collect data from the years 2000-2010 on the following variables:
- Real GDP
- Growth rate of real GDP
- Real GDP per capita
- Growth rate of real GDP per capita
- Population
- Population growth rate
- Unemployment rate (Unemployment, total
- Inflation rate
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Running head: INDONESIA MACROECONOMIC ANALYSIS
Indonesia Macroeconomic Analysis
Name
Institution
Date
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INDONESIA MACROECONOMIC ANALYSIS
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Introduction
Indonesia is a developing country located in Asia and spreads across a series of islands between
Australia and Asia. The country covers an area of approximately 1.9 million square kilometres and has a
population of around 243 million people. A big percentage of this population is Muslims making
Indonesia the country with the world largest Muslim community (BBC, 2016). Even though it has the
world largest Muslim community, the country is highly diverse ethnically with over 300 local languages.
Indonesia is also Asia’s biggest economy characterized by numerous economic activities. The country’s
economic activities include farming, manufacturing service delivery and different type of investment
(BBC, 2016). These mixed economic activities can be explained by the kind of culture in Indonesia. The
country’s culture ranges from rural hunters and gatherers to urban dwellers.
Until 2004, Indonesia was pretty much under a dictatorship and was less linked globally. The
president then was General Suharto. Before general Suharto reign and colonization of Indonesia, the
country was divided into sophisticated Kingdoms. Come 1900, the Dutch arrived and colonized the
country until 1949 when the Dutch transferred sovereignty after the country got independence (BBC,
2016). It was during this period that General Suharto came to power. General Suharto allowed army
involvement in all government activities and this led to high rate of corruption in the country. The general
fell in 1998 and Indonesia made the transition to democracy and devolved power from the central
government (BBC, 2016). The country’s first legitimate presidential election was held in 2004. Since then
the country has been trying to raise both politically and economically.
This paper analyses Indonesia's major macroeconomic indicators from the year 2000 to 2010. The
specifically discusses the relationship between the different macroeconomic indicators namely real GDP,
real GDP per capita, real GDP per capita growth rate, the growth rate for real GDP, population,
population rate, unemployment rate and inflation rate.
Body
To analyses Indonesia’s macroeconomics, we start by looking at the relationship between GDP,
GDP per capita and population. GDP is the total products and services produced by a country in a given
year. GDP per capita, on the other hand, is the GDP divided by the population during that period.
Therefore, GDP per capita is directly related to GDP but inversely related to population. This means that
if the GDP increases and the population remain constant then the GDP per capita will increase (Shapiro,
2010). However, if the GDP remains constant and the population increases then the GDP per capita will
decline. And if both GDP and population increase, then the effect on the GDP per capita will depend on
whichever indicator has increased by a bigger margin. Based on Appendix 1, it evident that Indonesia’s
INDONESIA MACROECON...