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These industries have a fixed low tariff level between 2000 - 2005, to allow them to restructure and become more internationally competitive. Australia's tariff reduction levels have gone way below those required by international trade agreement such as WTO agreement and the APEC. Australia in the last ... ... middle of paper ... ...d this would affect the voting ratios for the government as benefits of tariff reductions and free trade promotion would take a much longer period to arrive. Through the significant change of Australia's protection levels and the promotion of free trade, it is obvious that Australia's major trading partners is shifting from European countries to the high trading potential Asian countries. This is due the enormous demand in many developing countries, which results in a greater market for export.
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Question 1: (Word limit 500). The inflation target of the Reserve Bank of Australia (RBA) is 1~3%. Suppose now the inflation is going up quickly and will be higher than this target soon. Moreover, the strong Australian dollar has started to hurt the Australian export. Please use what you have learnt from this unit to discuss whether it’s possible for the RBA to keep the inflation within the target and also to depreciate the Australian dollar.
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