Macroeconomic Country Study: Australia Essay

1675 words - 7 pages

Economic Background:
In the past two decades, the Australian economy has been, and continues to be a very strong and steady economy because of steady GDP growth rates, with an average around 3.5% annually (Heritage.org). Australia has also benefitted from considerably low inflation and unemployment rates. Because of these macroeconomic values, Australia is ranked third in the ranking of regional economies (Heritage.org). The reasons for Australia’s ongoing success is mainly because of the boom in foreign demand of importing the plethora of natural resources and minerals the country contains, combined with the structural economic policies enacted in the 1980’s (The Economist - Australia’s Economy). Australia is also one of the few countries in the world that was essentially unaffected by the Great Recession during 2008 and 2009, because of the intuitive financial stimulus decision made by Australia’s policymakers after predicting economic collapse only five months before the recession’s conception (Barrett 9). Because of Australia’s economic success and ability to dodge the effects of the financial crisis of 2008, its currency, the AUD, or Australian Dollar, has driven the exchange rate to American dollars to around 1 AUD = $1.05 USD (The Economist). Recently however, the Australian economy is beginning to slow down due to China’s decrease in demand of Australia’s resources gained from mining operations, such as iron ore and coal (The Wall Street Journal), driving the AUD down to $0.90 USD (Bloomberg).
Strengths of Economy:
Australia’s main component of its economy is its exportation of natural resources, such as coal, iron ore, gold, nickel, and uranium. Australia is a natural mineral resource leader today in the world because of the discoveries of new geological mineral deposits made in the past 50 years. Australia took advantage of this, earning its spots as the world’s largest refiner of bauxite (unrefined aluminum), and the biggest producer of industrial diamonds and lead. The country also exports more black coal than any other nation (History of the Minerals Industry).
The largest slice of Australia’s exports go to China, exporting around 31.6% of its total exports, making China Australia’s biggest benefactor to its economy (DFAT). Although the exports mainly consist of the titanic amount of minerals that Australia mines, China also imports large quantities of wool, another heavily traded commodity of Australia. One of the leading wool industries, the Australian Wool Innovation (AWI) has said “it is easier to sell fine wool for clothes to China than to traditional recession-hit markets in Europe” (The Economist - Hitched to the China Wagon).
The exportation of wool in conjunction with the exportation of minerals and ore to China makes China a strong partner with Australia when it comes to resource trading. China obviously is dependent on Australia’s exportations, making Australia’s relations with China a strength of the overall...

Find Another Essay On Macroeconomic Country Study: Australia

Why the balance of payments and the current account deficit are so important

899 words - 4 pages of debits than credits on goods, services, incomes and unrequited transfers. A CAD is also due to a greater part of our investment coming from overseas savings.Foreign investment will increase foreign debt. This may not necessarily be a bad thing as it will increase a country's productivity leading to greater technological advancements and higher levels of employment and growth. Australia is still a young country with a potential for development

Foreign Trade and Investments with Indonesia

902 words - 4 pages appropriate role by the government to attract FDI flows. to explain these four questions. Majority of the previous studies are using aggregate data which is the result of using regression analysis method. This study will answer for the question number two, which is about the relationship between FDI and International trade of Indonesia in 2000 until 2013. II.BACKGROUND and THEORY The reason for a country to do the international trading with

Southeast Asia Prehistoric Settlers: James Cook

1461 words - 6 pages become competitive internationally in the market economy due to the economic reforms. This helped the country achieve a sustainable society. Australia is known to be one of the fastest growing regions of the world economy. An environmental issue is a big concern in Australia because it’s known to be the driest continent on earth which makes it defenseless to climate changes. Severe droughts, cyclones and forest fires have been occurring recently

Major causes of unemployment, recent unemployment performance, policy options available to the government to achieve a sustained reduction in the level of unemployment in Australian economy

1996 words - 8 pages provide incentive for employers taking a risk on the unemployed.Bibliography-Australian Department of Foreign Affairs & Trade (http://www.dfat.gov.au/geo/australia/index.html - Australian Facts).http://www.oecd.org/country/0,3021,en_33873108_33873229_1_1_1_1_1,00.htmlhttp://www.oecd.org/document/28/0,2340,en_2649_34569_37147228_1_1_1_1,00.htmlBooks-" TIm Dixon" Australian Economics 2007

Obesity in Australia

1142 words - 5 pages developing a chronic disease (ABS b, 2009). The relationship between obesity and chronic disease has an impact on Australia as a whole, most significantly through the financial burden it places on the country. A 2010 study estimated a direct cost of $10.5 billion from obesity; the Australian Bureau of Statistics estimated that in 2008 the total cost of obesity to Australian health-care, the workforce, taxpayers and the Government was $58.2 billion

Analysis of the likely impacts of the 2003-04 Australian Federal Budget on Australia's economic growth, unemployment and inflation

1240 words - 5 pages growth (ANZ Budget Review, 2003).The government's proposed higher education reform also merits close attention when discussing economic growth. While it provides incentives for overseas students to study in Australia, therefore increasing consumer spending and stimulating growth, the HELP scheme, which basically increases student debt may have negative growth repercussions in the long run. As students begin to repay their loans, consumer spending

Racism In Australia - The Rise and Fall of the White Australia Policy

1687 words - 7 pages Australia is a a multicultural country. That is because it has had an increased numbers of different come to live here for many different reasons.. They have all called themselves Australians and had accepted Australia as their new home. Although the perspective of accepting a different race/culture has changed, racism still exists in Australia. Australia’s indigenous people were the first victims of racism in this country. For about 50,000

Australia - A Unique Continent

1085 words - 4 pages TopicsPage1.Geographical Coordinates21.1 Location21.2 Area size21.3 Relative size22.Plate Tectonic Theory32.1Location due to plate tectonic theory32.2Pangaea32.3Gondwana33.Climate Case Study: Sydney and Alice Springs43.1Latitude43.2Distance from coast43.3 Ocean currents43.4Prevailing wind43.5Relief54.Australia’s Geographical isolation 64.1Flora64.2Fauna65. References used 71.Geographical Coordinates1.1 LocationAustralia is located in the

The Limits to Macroeconomic Policy

1454 words - 6 pages incomes of a few rich families within the country (“Limitations of Macro Economics”). Conclusion Macroeconomic policies look to increase supply and demand stimulus. This can be accomplished in a number of methods. The case study demonstrated in times requiring a demand stimulus, countries can cut taxes, raise government spending and decrease currency value. This would make products more attractive for export. The downside being increased debt

"Labor Market Institutions and the Effect on the Labor Force."

4293 words - 17 pages "there is a simple statistical relationship between the standard measures of these institutions and the cross-country pattern of unemployment." In order to produce these answers, they replicated the results of the IMF study and critically assess their robustness to minor changes. Finally, the evaluation indicated that unemployment trends in the 1990s, including that of countries widely heralded as "success stories" can be explained by the reform

Industry and External Environment Analysis

3196 words - 13 pages environment. Economic environment The economic environment is the socio-economic status and the country's economic policies, including socio-economic structure, economic system, development, macroeconomic policies and others.(Lumpkin & Dess 2001) All these factors have more direct and specific impression to the enterprise production and management, especially the international economic environment. Australia is the one of the biggest country

Similar Essays

Australia Is The Richest Country In The World

635 words - 3 pages the world. This is the richness that Australia has that makes this country a world leader.Today in Australia, out of a total population of just over 20 million people, well over 20% of Australians were born in another country. Of there more then half came to Australia from a non English speaking country in Europe, Asia, Middle east, South America and Africa. Although less then 20%of school children currently study another language besides English

Australian Migrants And Their Experiences In The 20th Century "Australia Has Not Always Been The Lucky Country For All Its Inhabitants In The Twentieth Century." Discuss

1033 words - 4 pages . Gradually, the Columbo Plan was introduced, where carefully selected Asians could come into Australia to study. This was done to satisfy the UN and the complaints from Asian Immigrants. Later, in the 1960's and 1970's, many Australians began to turn against the 'White Australia Policy', which was eventually abolished. It seemed that during this process, Australia was the lucky country for the migrants of Australia. Rather than supporting racism

Income And Wealth Inequality In Australia

1209 words - 5 pages Inequality is present in every economy, but to what extent are income and wealth in Australia unequal and what government polices contravene income and wealth inequality? Income is defined as money that an individual or business receives in exchange for providing a good or service or through investing capital, while wealth is a measure of the value of all of the assets of worth owned by a person, community, company or country. Income and wealth

Australian Economic Issues Essay

1879 words - 8 pages to ensure stable, sustainable growth. The GFC and the subsequent global financial crisis saw a rapid downswing in economic growth, hence the government’s response of expansionary macroeconomic policy to stimulate AD to increase the level of economic activity and counter the fluctuation. Post-GFC Trends Despite prediction of negative growth of -0.5%, Australia actually recorded positive growth of 1.0% in 2009-10. Australia also recorded