ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the net income deficit.
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the trade balance.
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the fact that we spend too much on imports.
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None of the above
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Detailed explanation-1: -Current Account in Australia averaged-4530.89 AUD Million from 1959 until 2022, reaching an all time high of 22391.00 AUD Million in the third quarter of 2021 and a record low of-21726.00 AUD Million in the fourth quarter of 2015.
Detailed explanation-2: -Australia suffers from a persistent Current Account Deficit (CAD) due to outflows in the Current Account exceeding inflows.
Detailed explanation-3: -Measuring the current account A deficit then means that the country is importing more goods and services than it is exporting-although the current account also includes net income (such as interest and dividends) and transfers from abroad (such as foreign aid), which are usually a small fraction of the total.
Detailed explanation-4: -There are three components to the current account – the ‘trade balance’, ‘primary income balance’ and ‘secondary income balance’. In economic analysis or commentary, most attention is usually given to the trade balance, which records the difference between the value of our exports and imports of goods and services.