You are not signed in | Sign in!

Does it really matter if there are more unemployed people in Australia than there are in other countries?  The answer is that it can make a big difference to the long term prosperity of Australia, and as such we must continually strive to achieve full employment.

Earlier it was suggested that a country which is experiencing unemployment is operating inside its production possibility frontier.  As a result, production levels will be lower than they might otherwise have been, and living standards will be lower.  It also means that there will be fewer goods and services available for export.

Generating export revenue is essential for a country like Australia.  We are dependant on our ability to import, and that means that we need access to foreign currency.  The best way to access these funds is to sell our goods and services overseas.  When this happens, the foreign buyer will need to purchase Australian dollars in order to complete the transaction; this will give us access to the foreign currency that we need.  Unemployment affects our ability to produce the exports that we need.

Finally, it is worth considering that labour is a productive resource.  When we have access to more resources, the aggregate supply curve will shift to the right.


When this happens we will end up with more goods and services, and we will also see less upward pressure on prices.  These factors combine to suggest that we will have more products available for export.  As a result, our external position will improve.

Current Page: International Impact 1 2 3 4 5 6 7 8 9 10 11