(b) Terms of trade is a measure of the ratio of export prices to import prices. From Figure 2, the terms of trade of Australia is in a favourable trend. An improving terms of trade indicates that Australia’s export price rises faster than import price. In 2008, Australia exports were more that imports, especially mineral resources like coal and mine, which are simply transform manufactured. For example, in 2008, China imported large amount of mineral resources such as coal from Australia for preparation of Olympics Game. An increase in export earnings had reduced the current account deficit of Australia. Current account balance of Australia in 2008 has improved from approximately -7% to -2.2% as shown in Figure 3. (c) Exchange rate in Australia is the value of Australia dollar (AUD) expressed in terms of foreign currencies. After a surprise fall in Australia's unemployment rate in first two weeks
(b) Terms of trade is a measure of the ratio of export prices to import prices. From Figure 2, the terms of trade of Australia is in a favourable trend. An improving terms of trade indicates that Australia’s export price rises faster than import price. In 2008, Australia exports were more that imports, especially mineral resources like coal and mine, which are simply transform manufactured. For example, in 2008, China imported large amount of mineral resources such as coal from Australia for preparation of Olympics Game. An increase in export earnings had reduced the current account deficit of Australia. Current account balance of Australia in 2008 has improved from approximately -7% to -2.2% as shown in Figure 3. (c) Exchange rate in Australia is the value of Australia dollar (AUD) expressed in terms of foreign currencies. After a surprise fall in Australia's unemployment rate in first two weeks