Question

Macroeconomics:
Briefly explain how the decline in Australia's international education impacting on the output, employment, price level and exchange rate of Australian currency.

Answer 1

Education is one of the most important industry contributing in the griwth and income if any economic system.

As the question put forward about decline in International education in Australia , definitely it is going to affect income, output and value of Autralian currency adversely.

Lets examine one by one each component

As we know output increase is possible through good amount of knowkedge skill and expertise along with physical resources. And this knowledge is procured through education only.

Also international education brings in new ideas information and expertise which is lacking in our own nation.

Hence decline in that international education will adversely affect output of Australia.

As international education will bring in foreign exchange for Australia by foriegn students,so reduction in supply of forex. will result in fall in thecurrency vakue of Australia.

Now what about employment ??

Clearly due to fall in education there willbe fall in employment level also.

As the demand for teachers and other related services to education will fall due to decline ,the employment will go down.

And the price level will move up due to fall in output level.