Australia Economy Notes

•To increase GDP, countries must invest in capital
goods:

• All of the factories, machines, buildings, technologies and

property needed by businesses to operate.

• If a business is to be successful, it cannot let its equipment

break down or have its buildings falling apart.

• New technology can help a business produce more

goods for a cheaper price.

• It’s one of the most “free” economies in the world.

• Because there are no truly pure market economies, Australia is

said to have a Mixed Economy.

• It’s actually very close to market because there are very

few economic “rules” in place by the government.

• Australia’s government does not own major industries or

businesses.

• Prices are set by the agreement of buyers and sellers rather than

by government rules.

•Australia is considered close to having a market
economy because:
•Businesses operate without too many rules from
the government.
•People are free to start a business and can do so
quickly.
•Courts use the laws of Australia to protect the
property rights of citizens.

• In Australia, people are free to own their own businesses and

property.

• They decide what they want to produce.

• Buyers and sellers are able to agree on prices, and competition

between sellers keeps the prices good for buyers.

• Business owners and consumers can depend on good laws to

protect them.

• The courts are considered to be fair and honest.

• It is very easy to start a business in Australia, the paperwork

usually takes less than a week!

• Australia’s GDP is 1.331 Trillion Dollars (in US Dollars, 2020).
• The GDP per capita (value of goods and services produced

per person) is $51,812 (2020).

• This is a very high number! They are ranked 13thin the world!

• Australia has such a high GDP because of the abundance

of the four factors of economic growth within the country:

• Natural Resources
• Human Capital
• Capital Goods
• Entrepreneurship

• “Gifts of nature”
• Natural resources are important to countries because

without them, countries must import other resources
they need (can be costly).

• A country is better off if it can use its own resources

to supply the needs of its people.

• If a country has many natural resources, it can

trade/sell them with other countries.

• Australia’s arable land is a valuable resource.

• Farmers grow a variety of crops.
• The land also provides pastures for beef cattle (an

important export).

• What percentage of the land is arable?

• 6.6%

• What are the major agricultural products?

• Wheat, barley, sugarcane, fruits, cattle, sheep, poultry

• Minerals are a major export: coal, iron ore, copper,

tin, gold, silver, uranium, nickel, tungsten, mineral
sands, lead, zinc, diamonds, natural gas, petroleum,
and OPALS.

• Australia is the world’s leader in bauxite, which is

used to make aluminum and coal.

• The sales of natural resources bring in money from all

over the world.

• To increase GDP, countries must invest in capital

goods:

• All of the factories, machines, technologies, buildings and

property needed by businesses to operate.

• If a business is to be successful, it cannot let its

equipment break down or have its buildings fall apart.

• New technology can help a business produce more

goods for a cheaper price.

•Australia’s businesses use advanced
technology to make their companies work
more efficiently.
•If a company does not keep its machinery up
to date, other companies will be able to
produce similar goods for a better price.

•What are being produced in the factories?

•Mining, industrial and transportation equipment,
food processing, chemicals, and steel

•To increase GDP, countries must invest in
human capital.

•Human capital includes education, training, skills,
and healthcare of the workers in a business or
country.

• Australia invests heavily in human capital.

• Children are required to attend school from 6-18.
• Taxpayers pay for schooling for all children.
• Literacy rate is nearly 100%.
• Workforce is well-trained and well-educated.
• Healthcare system is very good.

• All of these factors improve Australia’s standard of

living…one of the highest in the world!

• What percentage of the population over the age of 15

can read and write?

• 99%

• How long are students required by law to stay in

school?

• 18 years

• People who provide the money to start and operate

a business are called entrepreneurs.

• These people risk their own money and time because

they believe their business ideas will make a profit.

• Entrepreneurs must organize their business well for

them to be successful.

• They bring together natural, human and capital resources

to produce goods or services to be provided by their
business.

• Australia is a world leader in entrepreneurship.

• 1 in 12 adults own their own business.

• Laws in Australia are good for business: protecting

entrepreneurs and their property, easy to start a
business, few rules to restrict businesses.

• Entrepreneurs are good for Australia.

• Businesses keep the economy moving and provide jobs

for workers.

• Even though Australia has one the highest standards of

living in the world, it still struggles with some economic
problems.

• There is still poverty:

• The worst conditions are among the Aborigines.
• Life expectancy of Aborigines is much lower than the other

Australians.

• Aborigines tend to earn less income and do not have as good of

a system of healthcare.

• What percentage of Australia’s population is unemployed?

• 4.2% (2021)