Australia's Global Economic Position Quiz

Which of the following best describes a floating exchange rate system?

• The government sets the value of the currency

• The value of the currency is determined by market forces of supply and demand

• The currency is pegged to the US dollar

• The Reserve Bank of Australia fixes the exchange rate daily

What is Australia’s largest export commodity by value?

• Wheat

• Iron ore

• Wool

• Gold

Which of the following is NOT a component of Australia’s Balance of Payments?

• Current Account

• Capital and Financial Account

• Fiscal Account

• Net Errors and Omissions

A depreciation of the Australian dollar is most likely to:

• Increase the price of Australian exports in foreign markets

• Decrease the price of imports in Australia

• Improve the international competitiveness of Australian goods

• Reduce the value of export earnings

Which country is currently Australia’s largest two-way trading partner?

• United States

• Japan

• China

• United Kingdom

Which of the following best describes the term ‘terms of trade’?

• The ratio of export prices to import prices

• The total value of exports

• The total value of imports

• The exchange rate between two currencies

Which of the following is an example of a trade protection policy?

• Tariffs on imported cars

• Free trade agreements

• Floating exchange rates

• Export subsidies

The main purpose of a free trade agreement is to:

• Increase tariffs on imports

• Remove barriers to trade between member countries

• Fix exchange rates

• Limit the volume of exports

Which of the following is included in the current account of Australia’s Balance of Payments?

• Foreign direct investment

• Net goods and services

• Reserve assets

• Portfolio investment

A current account deficit means that:

• Australia is exporting more than it is importing

• Australia is importing more than it is exporting

• The value of the Australian dollar is rising

• The government budget is in deficit