External Stability/balance (1 Viewer)

[meyero]

Hey everyone,
as many people have theorised that one of this year's essays is to be on external stability i thought i'd start a thread which argued a few points.
Tim Riley shows that the terms external stability and external balance are not interchangeable. For example he defines external stability as X=M (export income is sufficient to pay for income expenditure) while external balance is when X=M, exchange rates are not volatile, and a low CAD as a percentage of GDP and Net Foreign liabilites.

i)Does anyone know if these terms are interchangeable or do they actually mean different things?
ii) Would you talk about only X=M or about xchange rate, CAD, NFL if asked about external stability

 

[ToO LaZy ^*]

i would tend to think that external balance meant X = M and external stability would mean keeping XR, CAD, NFL under control
but if you were asked on an essay question, surely, you'll write about XR, CAD, NFL rather than just X = M

 

[i-color]

yeah i agree with too lazy...i dont' think we should be trying to get technical with the terms of the question. I mean you could always define them in your essays, but I don't think you'd just concentrate on X=M if you were asked about external stability..........this is because what the govt focuses on is external stability and internal balance.......and they don't just focus on X=M.

 

[:: dreami ::]

yeah i agree too

are you sure you dont have the definitions mixed up?

i mean, the chapter defines external stability with YOUR external balance definition

 

[coroneos]

ummm this question wont be in the 2004 HSC.. its alreadi been asked before..

 

[KungPow]

Hey you're right. 2001 Q25 and 2002 Q26 and 27 (kinda). So much for that theory =/

 

[absolution*]

Because of course they never ask the same question twice. *looks around aimlessly*

...Globalisation.

I predict it will come up.

 

[aditya]

yes but it could be policy options for external stbalitly.... or... well thats all i got right now