Photo AI
What effect would a global downturn in the economic outlook have on Australia’s unemployment, output and exchange rates? Unemployment Output Exchange rates A - HSC - SSCE Business Studies - Question 8 - 2019 - Paper 1
Question 8
What effect would a global downturn in the economic outlook have on Australia’s unemployment, output and exchange rates? Unemployment Output Exchange rates A.... show full transcript
Worked Solution & Example Answer:What effect would a global downturn in the economic outlook have on Australia’s unemployment, output and exchange rates? Unemployment Output Exchange rates A - HSC - SSCE Business Studies - Question 8 - 2019 - Paper 1
Step 1
What effect would a global downturn in the economic outlook have on Australia’s unemployment?
Answer
In a global downturn, businesses may face reduced demand for their products and services. As a consequence, many may have to lay off employees or halt hiring, leading to an increase in unemployment.
Step 2
What effect would a global downturn in the economic outlook have on Australia’s output?
Answer
During a global economic decline, production and economic activity generally slow down. Thus, Australia’s output is likely to decrease as companies generate less revenue and cut back on production.
Step 3
What effect would a global downturn in the economic outlook have on Australia’s exchange rates?
Answer
In times of economic uncertainty, investors often seek safer assets, which can lead to a decrease in demand for riskier assets, including the Australian dollar. Consequently, this may result in a decrease in the value of Australia's exchange rates.
Step 4