Reference no: EM132739583

Indonesia's economic growth from 2004-2019 continued to fluctuate.

The highest fluctuation in Indonesia's GDP occurred in 2014 at 7.98% and the lowest was in 2009 at 4.54%. The low economic growth in 2009 was due to the global economic conditions which were still under pressure due to the crisis which exposed the Indonesian economy to several challenges that were not easy in 2009. These challenges were quite severe, especially in early 2009, due to the still strong impact of the global economic crisis which peaked at last quarter of 2008. Uncertainty related to the extent of the global contraction and to what extent the global economic recovery will take place, not only causes high risks in the financial sector, but also negatively impacts economic activity in the domestic real sector. This condition resulted in heavy pressure on the monetary and financial system stability in the first quarter of 2009, while economic growth continued on a downward trend due to a sharp contraction in exports of goods and services. Exports and tax revenues play an important role in a country's economic activity. Exports will generate foreign exchange which will be used to finance imports of raw materials and capital goods needed in the production process which will create value. The aggregation of added value generated by all production units in the economy is the value of the Gross Domestic Product. Taxes are used to carry out development in Indonesia. Apart from exports and tax revenues, the exchange rate also affects the size of economic growth. In an open economy, the growth rate will also be influenced by the exchange rate. The effect of exchange rates on growth rates can be seen both through the aggregate supply (AS), namely through the formation of capital, and through aggregate demand (AD), namely through international trade and investment transactions.

Based on the description above, make a research design to see the effect of exports, tax revenues and the exchange rate on economic growth in Indonesia!