New Zealand's Market Economy

Topics: Investment, New Zealand, Current account Pages: 4 (1699 words) Published: March 13, 2013
New Zealand operates its country by using a market economy. International trade is a huge factor in a market economy. New Zealand trades heavily with Australia, China, Japan, and the United States of America. “The New Zealand economy depends largely on its modernized agricultural sector. Although it contributes less than 10 percent of the gross domestic product (GDP), it occupies roughly 1 percent of the labor force, making it a highly efficient industry” (Stetter). “Leading agricultural exports include meat, dairy products, forest products, fruit and vegetables, fish, and wool. The country has substantial hydroelectric power and sizable reserves of natural gas. Some of their leading manufacturing sectors are food processing, metal fabrication, and wood and paper products (Economy of New Zealand).” New Zealand has an interesting economic history; it has been full of ups and downs since the 1980’s. Beginning as early 90s this country has experienced an increase in growth. This particular growth was sparked by private sector investment instead of increased fiscal spending (Conway 6). There was a brief decline in the latter part of the 1990s due to the Asian financial crisis but New Zealand proved their resilience and bounced back as the economy picked back up (Conway 6). A couple factors that contribute to this consistent growth and resilience in the economy are capital investments and productivity, they go hand in hand and both play a key role in sustaining an economy. Capital investments are intended to improve the capability of the economy to expand productivity. A risk to this is the more resources a country allocates to investment marks a decline in the output of consumer goods. However, if the investment is effective and prosperous it will lead to a rise in the output of goods. New Zealand’s economy contains strengths, weaknesses, threats as well as opportunities. Some strengths include trade deficits, their niche in agriculture, and a stable...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • New Zealand's Economy Essay
  • Economy Markets Essay
  • The economy and financial markets crisis Research Paper
  • The pursuit of a free market economy Essay
  • Essay about Economic Mixed and Market Economy
  • Essay about Free Market Economy vs. Command Economy
  • Market Economy And Command Economy Research Paper
  • Essay about A Market Economy

Become a StudyMode Member

Sign Up - It's Free