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17 Cards in this Set
- Front
- Back
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The Balance of Payments |
The record of transactions between Australia and the rest of the world during a given period, consisting of the two main accounts. |
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Current Account |
The account that shows the receipts and payments for trade in goods and services, transfer payments and income flows between Australia and the rest of the world in a given time period. NON-REVERSIBLE EXTERNAL TRANSACTIONS --> once you've paid me u can't back out m8 |
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CA Net goods |
The difference between what Australia receives for exports and what it pays for its imports. The account, like others, can be in balance, surplus or deficit Imports - debit exports - credit |
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CA Net services |
Services that are bought and sold without receiving a tangible good. services sold - credit services bought - debit |
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CA Net Primary Income |
Earnings on investments e.g. foreign owned companies/land in AUS Income in the form of rent, profits, interest & dividends flow in & out -Foreigner owns company in Australia, company makes profit, profit is defecit on NPI -Aussie owns foreign shares, receives dividends, credit on NPI |
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CA Net Secondary Income |
Non-market transfers --> products/financial resources are provided without a good or service being provided e.g. payouts on insurance claims, workers remittances (sending to homeland) & unconditional aid to developing nations |
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The Capital & Financial Account |
A record of the borrowing, lending, sales and purchases of assets between Australia and the rest of the world. REVERSIBLE TRANSACTIONS |
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Capital Account |
1. Capital Transfers |
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Financial Account |
Australia's transactions in foreign financial assets and liabilities. credit - net inflows (AUS ALWAYS HAS POSITIVE FINANCIAL ACCOUNT BALANCE - RELIES ONT HE SAVINGS ON REST OF WORLD) --> an increase in foreign investment into AUS or reduction in investment overseas debit - net outflows |
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FA Direct Investment |
Investment for the purposes of establishing a new business or the purchasing of shares in an existing company with the intention of partaking in the management of the business (10%+) |
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FA Portfolio Investment |
The buying of land, shares or other marketable securities (ie securities that are easily sold) in existing companies. Most foreign debt recorded here |
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FA Financial Derivatives |
Complex financial assets that have become increasingly significant. (ie they are securities that are linked to other securities such as bonds or shares) Value of such assets are derived from exchange rates, interest rates or indices etc. |
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FA Reserve Assets |
Foreign financial assets that are reserved and controlled by central authorities of financing and regulating payment imbalances. e.g. monetary gold (held by RBA), Special Drawing Rights, reserve positions in the International Monetary Fund & foreign exchange held by the RBA etc. |
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FA Other Investment |
Transactions not classified as any of the other categories of investment. e.g. trade credits, loans including financial leases, currency and deposits & other accounts payable and receivable. |
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Calculation of the Current Account |
Net goods + Net services + Net Primary Income + Net Secondary Income
(Net goods + Net services aka BOGS) |
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Calculation of the Capital & Financial Account |
capital account + direct investment + portfolio investment + reserve assets + financial derivatives + other investment |
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The Balance of Payments Calculation |
current account + capital & financial account + net errors and emissions = 0 NOTHING noT ANything wow/?? |
