twistedrebel
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my reply is pretty similar to the one you posted
Economics Marathon - 2010 (2 Viewers)
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elliottjohnson
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Well broadly speaking: the following topic areas are to be examined.
- increased international trade flows
- growth of international finance(deregulation in late 70's early 80's)
- growth of international investment and technology, increased fdi
- labour markets more open. Brain drain from Aust. point of view as top workers go to china, USA for higher pay.
An exchange rate depreciation can have positive and negative effects on the Balance Of Payments. As the AUD depreciated, Australia's servicing costs on foreign liabilities can rise significantly, increasing the outflow on the Net income Account, whilst also decreasing the financial inflows from overseas investment, causing our Net Income account to slip further into deficit
On the positive side, our imports become cheaper and more lucrative to foreign buyers, and the volume of exports can increase dramatically as foreign currencies can potentially be stronger than the AUD at that point in time; however, as the volume of exports increase, and as Australia is lucrative to FDI due to a lower exchange rate, the AUD will eventually appreciate from sustained investment and exports. An increase in investment will see the Financial Account make further gains
A depreciation will also likely reduce the demand for foreign imports as the price of imports will rise, potentially placing the BOGS into surplus.
Question: Explain why Globalisation can lead to negative outcomes for developing nations
On the positive side, our imports become cheaper and more lucrative to foreign buyers, and the volume of exports can increase dramatically as foreign currencies can potentially be stronger than the AUD at that point in time; however, as the volume of exports increase, and as Australia is lucrative to FDI due to a lower exchange rate, the AUD will eventually appreciate from sustained investment and exports. An increase in investment will see the Financial Account make further gains
A depreciation will also likely reduce the demand for foreign imports as the price of imports will rise, potentially placing the BOGS into surplus.
Question: Explain why Globalisation can lead to negative outcomes for developing nations
Well firstly interms of global trade systems:
1. They have been locked out of many regional trading agreements
2. Developed economies have high protection for their agricultural industries (e.g. EUCAP and the US's EEP)
3. The Doha development rounds have failed to reach agreements on issues that would benefit developing countries
4. It costs too much for developing countries to lobby against the developed countries that place protection barriers
Interms of the global financial archiecture:
1. Although FDI flows have increase 2/3 go to developing and only 3% to developing areas such as subsaharan Africa
2. Developing countries also receive less short term financial flows as there is less opportunity for speculators to gain large capital gains in these countries
3. The govts of these countries have taken loans from other countries and this foreign debt must be repaid. Total public sector debt was 1.11 trillion in 2006
For Aid
1. The developing world hasn't done that much only providing 0.3% of GWP compared with promised 0.7%
2. Around 39% is phantom aid
3 A lot is tied aid which is the which is spent on overpriced/unneccesary goods from the donor country
For technology;
1. Developing world does most of Research and development and well they focus more on how they can help themselves such as labour saving devices and life extending medication that doesnt rly help the developing countries
Q: What are the adv and disadv of trading blocs ?
1. They have been locked out of many regional trading agreements
2. Developed economies have high protection for their agricultural industries (e.g. EUCAP and the US's EEP)
3. The Doha development rounds have failed to reach agreements on issues that would benefit developing countries
4. It costs too much for developing countries to lobby against the developed countries that place protection barriers
Interms of the global financial archiecture:
1. Although FDI flows have increase 2/3 go to developing and only 3% to developing areas such as subsaharan Africa
2. Developing countries also receive less short term financial flows as there is less opportunity for speculators to gain large capital gains in these countries
3. The govts of these countries have taken loans from other countries and this foreign debt must be repaid. Total public sector debt was 1.11 trillion in 2006
For Aid
1. The developing world hasn't done that much only providing 0.3% of GWP compared with promised 0.7%
2. Around 39% is phantom aid
3 A lot is tied aid which is the which is spent on overpriced/unneccesary goods from the donor country
For technology;
1. Developing world does most of Research and development and well they focus more on how they can help themselves such as labour saving devices and life extending medication that doesnt rly help the developing countries
Q: What are the adv and disadv of trading blocs ?
twistedrebel
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advantage:
-Help in the gradual reduction of global protection barriers
-Allow countries access to other countries markets
-Increase specialization in countries and less wastage of resources
-Force countries to specialize in things they are good at.
Disadvantage:
-Some economist agree that trading blocs do not help global break down in barriers, and in the future we'll see the world dominated by trading blocs based on geographic locations.
-Gives preferential treatment to only selected countries
-usually not open to all countries
-Only promotes trade within a certain region
Explain TWI concept?
-Help in the gradual reduction of global protection barriers
-Allow countries access to other countries markets
-Increase specialization in countries and less wastage of resources
-Force countries to specialize in things they are good at.
Disadvantage:
-Some economist agree that trading blocs do not help global break down in barriers, and in the future we'll see the world dominated by trading blocs based on geographic locations.
-Gives preferential treatment to only selected countries
-usually not open to all countries
-Only promotes trade within a certain region
Explain TWI concept?
xdesires
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The Trade Weighted Index (TWI) measures the fluctuation of the Australian dollar against a number of currencies of Australia's trading partners, according to their importance in Australia's trade. Usually listed in descending order. It is a relatively accurate measure of the Australian dollar's purchasing power.
Explain the theory of the J Curve.
Explain the theory of the J Curve.
twistedrebel
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J Curve is not in the syllabus and i ve never heard of it. What topic does it come under?
NEGROizzle
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WTF?!?!? is sterilised? Simple engrish pwease man
xdesires
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...Okay then. I don't know how to put it in 'simpler' English. :/ Cause the opposite of that intervention is: 'unsterilised foreign exchange market intervention'. D:
I'll just choose another question?
Okay, um:
What are the three main types of exhange rate system? Identify the main differences between them.
I hope this is alright. > <!
I'll just choose another question?
Okay, um:
What are the three main types of exhange rate system? Identify the main differences between them.
I hope this is alright. > <!
BHS10
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Fixed exchange rate system - ER set and maintained by government or one of its agencies e.g. Reserve Bank
Flexible exchange rate system (dirty float) - exchange rate is set by the market forces of demand and supply
Managed exhange rate system (clean float) - exchange rate rate is set by the market forces of demand and supply, however the government may intervene (as a buyer or seller) to influence the exchange rate
How does free trade affect individuals, firms and the government?
Flexible exchange rate system (dirty float) - exchange rate is set by the market forces of demand and supply
Managed exhange rate system (clean float) - exchange rate rate is set by the market forces of demand and supply, however the government may intervene (as a buyer or seller) to influence the exchange rate
How does free trade affect individuals, firms and the government?
twistedrebel
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i m pretty sure that question was covered here:
mystery_meat
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Individuals:
- lower prices (reduction of protection, industries forced to become more competitive or fail, reallocation of resources, economies of scale etc)
- increased consumer purchasing power
- higher living standards (wider range of good available because of an increase in Ms, increase in purchasing power etc)
- increase in production, demand and employment in the longer term (result of the reallocation of resources, increases in efficiency, international competitiveness etc)
- may not have to fund subsidies (taxes, tax payer burden)
- short term unemployment may increase - businesses & industries may fail or be forced to reduce staff and structural changes may be required to prevent business failure & to become efficient, may lead to redundancies
- structural unemployment; indivduals may need to be retrained before reentering the workforce (skills and jobs don't match)
Unemployment should correct itself in the long term
Firms:
- forced to achieve allocative, technical & dynamic efficiency or fail
- increased demand in the long term (global); business is moe competitive, efficient, productive - lower prices
- potential to expand operations further (more efficient, competitive) - result in a bigger market, increase in sales, demand, production, profit etc etc etc
- decrease in the price of imported inputs
- high risk of business failure initially
- short term decrease in demand, production, profit
- infant industries may not be able to establish themselves
- dumping is enabled - lower dometsic demand for G&S, can't compete
Government:
- easing of burden to finance subsidies
- promote stronger relationships with other countries/economies
- encourages efficiency in businesses, trade, globalisation - economic growth
- economic development (enabled by economic growth, wider range of goods etc)
- an increase in X may slow/prevent further deterioration of CAD, however this may be counteracted/prevented if economy becomes reliant upon Ms - worsen CAD
- no revenue earned from tariffs
- country may become dependant on Ms, not self-sufficient (could pose problems in terms of defence)
Outline the likely future trends in the direction of Australia's exports.
Just realised this has been answered several times. Ah well.
Last edited:
just a correction - you got the two mixed up:
clean float is the flexible exchange rate.
a dirty float is the same as a managed exchange rate system.
and a fixed exchanged rate system is also known as a 'pegged' system
elliottjohnson
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not sure, is that even part of the course didnt see it in unemployment. BUMP
elliottjohnson
Member
Explain the relationship between external stability and the distribution of income in Australia.
they are both economic issues LOL
what are social costs of inequality of income dist.?
