What has been the trend of Australia's CAD as a percentage of GDP since the 1970s?

The trend of Australia's current account deficit (CAD) as a percentage of GDP since the 1970s provides an important insight into the country's economic circumstances over the decades. The choice that indicates a rise from 1.1% of GDP in the 1970s to approximately 4.3% in the 1980s accurately reflects the significant increase in the CAD during that time.

During the 1970s, Australia's economy faced various challenges such as oil price shocks and inflationary pressures, which had a noticeable impact on its balance of payments. The CAD percentage was relatively low at this time, reflecting either a small deficit or a stable current account position. However, as Australia transitioned into the 1980s, it experienced a combination of factors, including increased foreign investment and greater import demand, leading to a widening of the CAD. Thus, the figure increasing to around 4.3% in the 1980s is supported by historical data and reflects this economic reality.

The significance of this choice lies in its representation of the broader economic trends seen in Australia, illustrating how fluctuations in external trade, investment, and domestic policy impact the current account balance over time. Understanding this trend is crucial for analyzing Australia's economic history and its response