Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
Benefits of Trade |
- Boosts national production - Increased employment - Increased income - Lower inflation (cheaper imports) - Increased consumer choice - Develop international relations - Provide access to different resources - Allows countries to specialise their production |
|
|
Australia's Balance of Payments - Definition |
Quarterly statistical record of Australia's financial transactions with the world = exports - imports |
|
|
Australia's Balance of Payments - Current Account |
Consists of: - Net goods - Net services - Net primary income - Net secondary income |
|
|
Current Account - Net goods (definition) |
Dollar value of exports minus imports of goods = Balance on Merchandise Trade / Trade Balance (BOMT) |
|
|
Current Account - Balance on Goods & Services (definition) |
= Net Goods and Net Services |
|
|
Current Account - Net services (definition) |
Dollar value of exports minus imports of services |
|
|
Current Account - Net primary income (definition) |
Dollar value of international transactions EG: interest on debt, rent on property - Makes up significant portion of Australia's Current Account |
|
|
Current Account - Net secondary income (definition) |
Dollar value of gifts, taxes, pensions, foreign aid - Only a small portion of the Current Account |
|
|
Australia's Balance of Payments - Capital and Financial Account |
Consists of: - Capital Account (net capital transfers & net acquisition of financial assets) - Net Investment (direct & portfolio investment) - Net Reserve Assets - Net Errors & Omissions |
|
|
Direction of Australia's Balance of Payments |
Surplus in Capital & Financial Account Due to: - Australia has relatively weak exchange rate - Good opportunities for investment (abundant natural resources, access to skilled labour, economically free, politically stable) Deficit in Current Account - Not in debt, if it can be afforded to pay it back |
|
|
Australia's Exchange Rate - Definition |
= Price of one currency in relation to... - Another currency: how much of another currency 1$ AUD will buy - Trade Weighted Index (TWI): average exchange rate for a basket of currencies |
|
|
Supply factors affecting the value of the AUD dollar |
Supply Factors - Price of overseas imports - Demand for imports - Consumer/business confidence - Australia's economic strength |
|
|
Demand factors affecting the value of the AUD dollar |
Demand Factors - Price of Aus exports - Commodity prices - Speculation of future prices - Interest Rates - Overseas economic strength |
|
|
Australia's Foreign Debt - Definition |
= The balance of Australian borrowings from overseas minus overseas borrowings from Australia - Cumulative figure Public Debt consists of borrowings/loans by government Private Debt consists of borrowings/loans by private companies and individuals |
|
|
Australia's Foreign Debt - Positive & Negative Effects |
Positive - Enables economic growth, as increased investment leads to an increased GDP Negative - Funds are used to pay off loans (rather than to increase GDP/improve living standards) - Australians pay high interest rates on loans (as they need to remain high to attract overseas investment) |
|
|
Trade Liberalisation - Definition |
= The removal of restrictions/barriers on the free exchange of goods between nations. Includes the removal/reduction of: - Tariffs (taxes on imports) - Subsides (a sum of money granted by the government to keep prices of g&s low - INCREASING quotas - (limited/fixed no. of g&s) |
|
|
Trade Protection - Definition |
= The economic policy of restraining trade between countries Includes the introduction of: - Tariffs - Subsides - DECREASING quotas |
