The year-end percentage change of Australia’s inflation rate increased from 2.2% to 2.5% in the last quarter (RBA,…
Opportunities: The Australian economy has experienced continuous growth and features low unemployment, contained inflation, very low public debt, and a strong and stable financial system. By 2012, Australia had experienced more than 20 years of continued economic growth, averaging 3.5% a year. Demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports.…
Fluctuations in Australia’s exchange rate will have a significant affect the Balance of Payments. Particularly (portfolio investments). Australia’s current account deficits have been financed by foreign capital attracted to relatively high domestic interest rates. This goes on that because Australia has relatively high interest rates compared to other economies, overseas investors are more likely to invest in Australia which is shown as a credit on the financial account, portfolio investment. However this will worsen the CAD as the refturns from the investment are going back overseas and this is shown as a debit on the current account, net primary income. However, growth in foreign investment in Australia has been strong and successive and Australian governments have encouraged the inflow of foreign investment in order to improve Australia’s economic performance. As a…
Income tax: it’s a most important revenue stream in Australia. Income tax is imposed in earnings.…
The demand for Australia's currency in the foreign exchange market (Forex) is a derived demand. It is derived from the demand for a country's exports of goods and services and its assets.…
Economics growth is, it the short run an increase in real GDP and in the long run an increase in the productive capacity of an economy (the maximum output that the economy can produce). GDP stands for Gross Domestic Product which is the country’s production of goods and services valued at market price in a given time period. Real GDP is when these figures are corrected for inflation using a base year (The UK uses 2003 as its base year). It can be measured in three different ways; the output measure is the value of the goods and services produced by all sectors of the economy; agriculture, manufacturing, energy, construction, the service sector and government. The expenditure measure is the value of the goods and services purchased by households and by government, investment in machinery and buildings. It also includes the value of exports minus imports and finally the income method is the value of the income generated mostly in terms of profits and wages. Economic growth is often a result of low unemployment, which has an effect on the components of aggregate demand in that consumption will rise as when more people have a job, more people have more disposable income, savings and investment rise and with this productivity rises too. Long-term economic growth will arise from a continuous percentage increase in real GDP however it may not always be sustainable.…
The fundamental reason which underpins the importance of exports to Australia is economic growth. Exporting within Australia is important on both a macro and micro level. On a Macroeconomic level exports assist the success of imports within the nation and therefore help the expansion of the economy. Furthermore exports help Australia take advantage of economies of scale. Due to the fact that Australia is a small country, known in exporting mostly agricultural and mining products the domestic market is limited in growth, exporting is therefore needed to expend into different markets.…
Another challenge facing Australia during the Asian century is the stigma and prejudice of Asia. As stated above Australia has had a dark history in relation to racial acceptance and diversity. It was less than 50 years ago where if you were not of European decent you could not gain citizenship in the country. It was only after the Vietnam War that Australia abolished such legislation, but still today there is still major prejudice against Asia. Islamophobia and a condescending view of Asia as a whole does restrict Australia fully benefiting from the Asian century. In relation to Islamophobia, post 9/11 hate has severally affected Australia’s engagement with Central and Middle-Eastern Asia. The attack on the twin towers in 2001 changed the…
The Australian economy can fluctuate due to many factors, but exchange rates in particular can have great influences on the economy. Over the last two decades the dollar has been appreciating at a sustainable rate, because demand of the $A is increasing and supply of $A is decreasing, which has seen such effects as a worsening of the CAD, reduction in GDP along with a few positive impacts.…
• ∵ Billabong rely on one markets in 2009. It lefts itself exposed to risk…
Australia has several ties with other countries. These ties are established in several ways, one of which is through trade. The nature of trade includes exporting and importing goods and services which form trade links with partner countries. Trade comes with its advantages and disadvantages. Australia also takes part in multilateral agreements, such as APEC, to be able to strengthen trade links.…
Introduction: What factors affect the demand and supply of Australian dollars in the foreign exchange markets? Distinguish between the possible causes and effects of currency depreciation and a currency appreciation on the Australian economy. What forces have come into play, if any, in the past four months that have affected the value of the Australian dollar?…
In today society, in order to see and understand how the Australia’s economy develops and operates, economists often compare and contrast the Australian economy with other highly advanced industrialized economies around the world such as US, China, Korea, etc. In this essay, I will compare and contrast Australia and Japan’s economy to see how each system deal with specific issues such as economic growth, quality of life, employment and unemployment, distribution of income, environmental sustainability and the role of government.…
In the past half-decade, income inequality has increased significantly in Western Australia. As shown in Figure 3, that if Western Australia were a country it would be as unequal as Portugal (although much richer), and slightly less unequal than the United States (US). On the other hand, if the Capital Territory or Tasmania were countries – they would be as unequal as Switzerland or Norway. Switzerland and Norway are among one of the most equal countries in OECD countries (ABS, 2015) therefore, the Capital Territory and Tasmania are currently doing well and prove to be in a good…
Australia has a long history of large and persistent current account deficits. During the 1960s the current account deficit averaged the equivalent of 2 per cent of gross domestic product. The CAD rose considerably, due to the floating of the Australian dollar and the opening of the capital account in 1980s, and by 1990s CAD has sustained around an average of about 4.5 per cent of GDP. However, in recent years the deficit has been falling and in 2011 it was just 2.25 per cent.…