The "Perfect" Little Economy of New Zealand | Economics Explained

New Zealand's economy is modest in GDP but excels in innovation, especially in agriculture. The country balances free market and government roles effectively, maintaining a budget surplus. Despite high taxes, New Zealand is a top business destination due to its efficient legal system and low corruption. However, immigration and property prices pose challenges, with many skilled workers moving to Australia.

What is a key lesson from New Zealand's economic story?

• GDP figures are the only measure of success.

• High GDP per capita is essential for economic success.

• Developing countries have better economic success.

• Economic success can be achieved with modest GDP figures.

What was a major change in New Zealand's agricultural policy in the 1980s?

• Introduction of new subsidies for farmers.

• Shift to manufacturing and services.

• Complete removal of agricultural subsidies.

• Increase in government-fixed prices for crops.

How did New Zealand's farmers respond to the removal of subsidies?

• They relied more on government support.

• They innovated and diversified their crops.

• They continued with traditional farming methods.

• They stopped farming altogether.

What is a characteristic of New Zealand's approach to public services?

• Focus on reducing public spending.

• Minimal government involvement.

• Strong worker protections and welfare.

• Privatization of all public services.

Why is New Zealand considered an easy place to do business?

• Efficient and low-bureaucracy environment.

• Complex legal systems.

• High levels of corruption.

• Low corporate tax rates.

What is a significant factor in New Zealand's business environment?

• Difficulty in accessing electricity.

• High cost of office space.

• Lack of legal protections.

• Emphasis on property ownership and dispute resolution.

What challenge does New Zealand face due to its economic success?

• Decreasing property prices.

• Loss of skilled workers to Australia.

• Decline in agricultural output.

• Lack of foreign investment.

How has immigration affected New Zealand's cities?

• Increased availability of housing.

• Made cities more affordable.

• Decreased property prices.

• Increased property prices significantly.

What is a result of New Zealand's two-tier immigration system?

• Equal opportunity for all immigrants.

• Easier entry for non-English speakers.

• Increased difficulty for skilled workers to enter.

• Preference for wealthy, skilled English speakers.

What is a consequence of New Zealand's relationship with Australia?

• Net migration of professionals to Australia.

• Decreased cultural exchange.

• Increased trade barriers.

• Higher salaries in New Zealand.