Australia's Place in the Global Economy

These flashcards cover key concepts related to Australia's place in the global economy, focusing on trade statistics, historical shifts, financial flows, and trade agreements.

What was the average tariff rate in Australia in 2023?

0.5%, up from 25% in 1983.

What is Australia's rank in the world economy as of 2023?

13th largest economy, mid-ranked among advanced economies.

How much is Australia's net foreign debt as of 2023?

$1.3 trillion.

Which country is the largest destination for Australian exports in 2023?

China, accounting for 33% of exports.

What are the main components of Australia’s imports?

Capital goods, intermediate goods, and consumer goods.

What factors have led to Australia being a net capital importer?

Low domestic savings and high investment demand.

What was the significant economic trend for Australia’s trade during COVID-19?

Surpluses recorded during the recession due to high commodity prices and low interest rates.

Identify a structural challenge facing Australia's export composition.

Dependence on primary commodities which leaves the economy vulnerable to price/demand volatility.

What is the primary reason for the increase in Australia's net primary income deficit?

High foreign ownership leading to large outflows of dividends and interest payments.

What is the impact of a weaker Australian dollar on exports?

It boosts export income, particularly in commodities.

What does a current account deficit (CAD) indicate about an economy?

It reflects a country borrowing to fund its spending beyond its income.

How did Australia’s trade policies change since the 1970s?

Australia shifted from high protectionism to reducing trade barriers significantly.

What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)?

A multilateral free trade agreement that aims to promote trade and investment among member countries.

What was a key feature of the Australia-United States Free Trade Agreement (AUSFTA)?

It aimed to enhance trade ties between Australia and the US by reducing tariffs and barriers.

What is the significance of the J Curve in economic terms?

It describes the initial worsening of a trade balance following a currency depreciation before eventual improvement.

How does the Reserve Bank of Australia (RBA) influence the exchange rate?

Through monetary policy adjustments, such as raising interest rates.

What is a primary income account in the context of Australia’s balance of payments?

It records interest and dividends paid on foreign liabilities.

What are Australia's main export commodities in 2023?

Iron ore, coal, gold, LNG, beef, wheat, and wool.

What role does foreign investment play in Australia’s economy?

It provides capital for job creation, infrastructure funding, and technological advancements.