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Effects of Internal and External Stability on Australia
Economics
3 Found helpful • 4 Pages • Essays / Projects • Year: Pre-2021
The global economy has both positive and negative effects on Australia’s internal and external stability. These effects can be seen throughout the Commodities Investment Boom Phase 2 [CIB2] (2010-2012) and the Extraction Period [EP] (2013-2015), largely due to economic conditions faced by Australia’s main trading partners such as China, Japan and the United States. Australia’s internal stability is comprised of its domestic inflation and unemployment rates. Whereas, Australia’s external stability is comprised of both cyclical and structural factors. The cyclical factors affect the level of demand, thus enabling both positive and negative effects on external stability; these include Australia’s Terms of Trade (The value of exports relative to imports) (ToT), exchange rate, and international competitiveness. The structural factors relatively have a negative effect on external stability; these include net foreign debt and net foreign liabilities
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