Final answer:
People rarely inhabit the interior of Australia due to its arid climate with little rainfall. Most of the population lives in areas with Type C climates along the coasts where economic activity is concentrated. The interior, although valuable for mining and agriculture, has harsh living conditions that limit settlement.
Step-by-step explanation:
Few people live in the interior of Australia because there is very little rainfall in the interior. Central and Western Australia are sparsely populated with approximately 40 percent of the interior being desert, experiencing Type B climates, known for high temperatures in the summer and substantial temperature variation between day and night. The interior's terrain, consisting mostly of deserts and semi-arid plateaus, is not conducive to sustaining large populations.
The majority of Australia's population resides in two main core areas with Type C climates situated on the southeastern coast and around Perth on the western coast. These are regions where economic activities are concentrated, and where the climate is more moderate, hence more people choose to live there. Cities like Alice Springs in the outback exemplify the sparseness of settlements in the vast interior.
The outback of Australia is noted for its mining and agricultural activities, despite the low population. The extensive grasslands support a significant proportion of the world's wool production and provide grazing for massive herds of livestock. However, the extreme conditions and lack of substantial rainfall make urban development and dense population challenging.