Foreign Investment Question (1 Viewer)

[darookpark]

This question was from the 2002 CSSA trial
Explain the impact of foreign investment on the Australian Economy?

its worth 5 marks
i was just wondering what they wanted us to write

 

[symo]

Originally posted by darookpark
Explain the impact of foreign investment on the Australian Economy?

- foreign investment = expenditure on capital equipment = expansion in the production possibility frontier + eco growth
- foreign investment fills the gap between national savings and national consumption/investment. adds to CAD net incomes + foreign debt, therefore worseninig external stability. debt sustainability problem + debt trap may occur.

 

[numg]

Foreign investment increases demand for AUD, affecting international competitiveness...

 

[timmii]

increase employment - by raising demand
Improved productivity by increasing capital stock ---> growth
Access to more funds can encourage more entrepeneurial enterprises ---> eco growth
diminished intl competitiveness by raising value of $A
Raises living standards - more goods and services available, of higher quality
Foreign investment can bring foreign management skills, expertise and technology, which can improve the efficiency and productivity of domestic economy
worsens CAD ---> debt trap of servicing payments

I gave my notes away so i cant remember what else i wrote sorry