Potential Short-Run Economic Impacts of the Recent Japanese Disaster Essay

Potential Short-Run Economic Impacts of the Recent Japanese Disaster on the Australian Economy - Essay Example According to the research findings, it can, therefore, be said that specifically, the study of microeconomics allow us to have better understanding about the movements of money from the local firms to household which often times is dictated by the movements of a curve in demand and supply of goods and services in domestic and global markets. Furthermore, the study of microeconomics allows us to reflect on interrelated between salary and wages, employment and unemployment rate, its potential effects on business performances, and the economy as a whole. Based on the Keynesian model, economic recession and contractions are usually caused by the presence of inadequate demand for Australian goods and services. In fact, the post-Keynesian economics proposed the theory of aggregate employment such that the distribution of income, economic growth and developments in trading practices are dictated by the demand-side curve, Although the post-Keynesian economic theory suggests that the market o f a competitive economy is dictated by the demand-side curve and will never attain or satisfy the idea of full employment, economists generally believe the presence of inadequate demand for goods and services can cause a serious market failure and economic problems. With this in mind, the presence of inadequate demand can result in the presence of high unemployment rate. The recent tsunami in Japan has to lead to a significant decrease in the demand for Australian coal and iron ore. The problem with a sudden decrease in demand for goods and services is that the business owners of local firms in Australia may simply lay-off some of its current employees.