ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in Australia’s interest rate
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an increase in interest rates of major trading partners
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a decrease in Australia’s inflation rate
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improved transport infrastructure
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Detailed explanation-1: -The current account records the value of the flow of goods, services and income between Australian residents and the rest of the world. The Treasury’s budget modelling indicates that the projected current account deficit will be driven by weaker global demand for Australian exports and a fall in commodity prices.
Detailed explanation-2: -Australia has a comparative advantage in the export of resource and agricultural commodities. Together these commodities account for a relatively large share of our exports and have more volatile prices than those of the goods and services Australia imports.
Detailed explanation-3: -Australia is experiencing record levels of inflation as a result of knock-on effects from the COVID-19 pandemic, Russia’s invasion of Ukraine and strong consumer demand.
Detailed explanation-4: -Australia’s economy depends on trade. Traditionally, Australia exported raw materials to its former colonial power, Great Britain, and to other European countries.