ECONOMICS (CBSE/UGC NET)

ECONOMICS

INFLATION

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Due to increased incomes, Chinese consumers buy more Australian made goods and services. How will this affect Australia’s GDP?

A	Australia’s exports decrease (net exports decrease), GDP decreases
B	Australian exports increase (net exports increase), GDP increases.
C	Australia’s imports increase (net exports decrease), GDP decreases
D	None of the above

Explanation:

Detailed explanation-1: -China is Australia’s largest trading partner. Trade and investment with China is central to Australia’s future prosperity. In 2020, China bought $102 billion of Australian exports, more than a quarter of Australia’s total exports to the world; China is our top overseas market for agriculture, resources and services.

Detailed explanation-2: -The factors which affect Australia’s economic growth include: domestic and global income levels, level of investment, government policies and the quality and quantity of Australia’s factors of production (FOP).

Detailed explanation-3: -Mining. Mining has contributed to Australia’s high level of economic growth, from the gold rush in the 1840s to the present day.

Detailed explanation-4: -Sample answer: Australia’s exports in services, such as education, finance, tourism, communication and insurance has increased in the last two decades as Australia has a greater comparative advantage in producing these service exports.

There is 1 question to complete.