Is New Zealand far or close from a steady state economy and what is their depreciation...

Is New Zealand far or close from a steady state economy and what is their depreciation rate?

Expert Solution

1)New Zealand is close from a steady state economy.

Steady state economy is an economy made up of a constant stock of physical wealth or capital and a constant population size .A steady state Economy has the characteristics

*Sustainable scale

*Fair distribution

*Efficient allocation

* High quality of life

New Zealand on a path to becoming a steady state Economy because

*Newzealand is one of the world's most stable democracy

Newzealand has a parliamentary democracy developed from the British model .Diverse and representative parliament of the country helped to keep public engagement with the political processes high.

* Newzealand has always enjoyed Economic stability

The economy of Newzealand is a highly developed free market economy .lt is the 53rd largest economy in the world in terms of nominal GDP . Newzealand's economic freedom score is 84.1, making its economy the third freest in the 2020 index.

*Slow population growth

The population growth in Newzealand has been slow and constant over the past few decades.The population in 2020 is only 4,822,233.

Existence of large opportunities

Investors and entrepreneurs find Newzealand a very attractive Economy for investment because regulations are very low.Even of their plans require extra capital, Newzealand has a well developed financial sector that can offer a wide range of financing instruments.

How ever if Newzealand is to make a transition to an economy that is ecologically sustainable, socially just, healthy and invigorating,the structure of the economy will be changed dramatically

2)The correct rate is to be applied is 8.5 percent straight-line or 13 percent diminishing value( source: www.ird.govt.nz)

Rahul Sunny answered 6 months ago

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