External Balance Defining the Problem, Policy Implemented to Deal with the Problem of External Stability

External stability or external balance is a general term which describes a situation where external indicators such as the balance of payment, foreign liabilities and the exchange rate are at a sustainable level, that is, a level where they can remain in the longer term without negative economic consequences. The past two decades saw the sweep in of globalisation, what was also seen as was the significant levels of external imbalance in Australia, which resulted in challenges on all three key indicators of external stability.
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