Essay Four (Exchange Rates): Topic 2 – Australia in the global Economy Outline the causes of a decrease in demand for the Australian dollar‚ and discuss the impacts on the Australian economy of a sustained depreciation of the Australian currency. The exchange rate is a measure of the value of a currency relative to another and is influenced by the demand and supply of the Australian Dollar (AUD). Changes in any of the factors that affect supply and demand causes the AUD to rise or fall. The demand
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Pros and Cons of an appreciation in Australian dollar In the recent days‚ Australian dollar has witnesses a significant appreciation and keeps strong. To put in a simple way‚ appreciation of Australian dollar‚ for our ordinary consumer‚ means we can buy more goods than before using the same amount of money. This is caused by an increase of purchase power of Australian dollar. As for choices of consumers‚ foreign goods are especially welcomed for the simple reason that they become relatively cheaper
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Question 2 a) A fall in the value of the Australian dollar (AUD) against the U.S. dollar (USD) benefit Billabong in two folds‚ strengthened price competitiveness and translation advantage. Firstly‚ the Americas segment accounts for about 50% of Billabong’s sales revenue in 2008 and 2009. (Appx.1) In case of depreciation of AUD against USD‚ the price of imported surfwear to the U.S. in terms of USD will decrease. The US importers demand more for Billabong’s products. The sales increases from the
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rate and fiscal policy on the Australian Economy in the past twenty-(20) years. Introduction The Australian economy is one of the most stable globally and the floating exchange rate has played an important role in maintaining that stability. This essay seeks to assess the relative importance of the floating exchange rate and fiscal policy on the Australian economy over the past fifteen-(15) years. In order to do so‚ it looks at the history of the Australian economy over that period‚ how it has
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The Impact of Globalisation on the Australian Economy Globalisation is not new. Australia has been involved in trade‚ investment‚ financial flows‚ technology transfers and the migration of labour since its foundation as a colony. What has changed is the size‚ direction and influence of these transfers‚ especially since 1980. There are a number of factors that have aided this transformation. They include: The expansion of new markets foreign exchange and capital markets are linked globally
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Economy of Australia Globalization has largely benefited the Australian economy. Australia has an abundance of natural resources that their population of 23 million people can’t use‚ so they sell the surplus to other countries that have a demand for the resources‚ giving Australia a world market of over 6.5 billion people. The Australian economy has experienced continuous growth and low unemployment‚ contained inflation‚ very low public debt‚ and a strong and stable financial system. By 2012
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IMPACT OF GFC ON AUSTRALIAN DOLLAR As United States of America and other European countries faced recession there were few developing Asian countries such as China and India which were least affected. China and India recorded 9.7 and 10% GDP growth respectively from 2006. Australia has abundant natural resources such as Iron ore‚ coal‚ Uranium etc. As these two hugely populated large economies which also consume huge resources was the main factor which helped Australia in surviving GFC (IMF 2009)
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Australian Dollar Analysis History: * The Australian Dollar is the currency of the Common Wealth of Australia‚ including Christmas Island‚ Cocos (Keeling) Islands and Norfolk Islands as well as the independent Pacific Island States of Kiribati‚ Nauru and Tuvalu. Within Australia it is almost always abbreviated with the dollar sign ($)‚ with A$ sometimes used to distinguish it from other dollar-denominated currencies. It is subdivided into 100 cents. * Prior to 1983‚ Australia maintained
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Appreciating Australian Dollar Essay Discuss the impacts on the Australian economy of a sustained appreciation of the $A The Australian economy can fluctuate due to many factors‚ but exchange rates in particular can have great influences on the economy. Over the last two decades the dollar has been appreciating at a sustainable rate‚ because demand of the $A is increasing and supply of $A is decreasing‚ which has seen such effects as a worsening of the CAD‚ reduction in GDP along with a few
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the recent trends in Australia’s major economic objectives. (Economic growth‚ inflation‚ unemployment‚ the exchange rate‚ environmental sustainability and distribution of income) Economic growth - Economic growth occurs when there is a sustained increase in a country’s productive capacity over time. This is generally measured by the percentage increase in real gross domestic problem. The target for economic growth set by the government is around 3-4%. Australia over the past 20 years has
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