HSC Economics question (2 Viewers)

[Raven]

Hi ppl,

The question is : ANALYSE THE IMPACT OF RECENT CHANGES IN THE VALUE OF THE AUSTRALIAN DOLLAR ON THE AUSTRALIAN ECONOMY. INCLUDE REFRENCE TO THE IMPACT ON THE CURRENT ACCOUNT DEFICIT (CAD) AND POLICY OPTIONS AVAILABLE TO THE GOVERNMENT TO INFLUENCE THE VALUE OF THE AUSTRALIAN DOLLAR.

Please help me,because i have no idea what to write.


Thanks in advance

 

[bobo123]

well
our dollars gone up a bit recently, this makes our imports less expensive, increasing the demand while exports more expensive,lowering the demand. this makes our CAD worse. But at the same time, our KAS is increasing to balance our CAD. inflation goes down because of lower import prices which may stimulate more investment and growth. Since inflation will be lowered by the dollar going up, governments can adopt more expansionary fiscal policy. The govt. could also use monetary policy like via the RBA to dirty the float of the AUD so our CAD doesnt go too high (i think the max sustainable limit of CAD is 5% of GPD?).

 

[AGB]

take a look at this link....i did an essay on this topic recently and used the site below for a bit of help

http://www.theage.com.au/articles/2003/01/19/1042911265579.html

cheers

 

[Raven]

Thanks a lot bobo 123 and AGB. I really appreciate your help!!!!

 

[AGB]

raven wot is ur email addy??? ill send u my essay

 

[Raven]

thanks a lot. My e-mail is:

acta_est_fabula@hotmail.com


I still have one week till the essay is due so i am going to r

research more on this topic,but it is nice to have some sort of

guide from a person who actually knows whats happening.

Thanks a lot

 

[AGB]

it should be in your inbox waiting...

 

[Minai]

With ppl like u guys, I don't need to come here at all!

 

[AGB]

just another quick thing raven.....

the 4 main types of government intervention are:
Direct intervention (the RBA enters the market as a direct buyer/seller of $A)
Indirect intervention (RBA uses monetary policy to change levels of capital inflow/outflow)
Macroeconomic policies (used by the government i.e. fiscal)
Jawboning (when an authority e.g. MacFarlane, Eadey Costello etc. says the exchange rate is undervalued/overvalued)

hope it helps

 

[Raven]

thanks again!I agree with MinAi i created this thread today and already i have replies with really helpful info!!!1


God Bless this forum!

 

[Raven]

hopefully i will be able to contribute to this forum and other forums,because i just ask questions and never actually help people.

 

[Raven]

MinAi do you have any other suggestions on what should i include in the essay?


Thanks in advance

 

[Minai]

Originally posted by AGB
just another quick thing raven.....

the 4 main types of government intervention are:
Direct intervention (the RBA enters the market as a direct buyer/seller of $A)
Indirect intervention (RBA uses monetary policy to change levels of capital inflow/outflow)
Macroeconomic policies (used by the government i.e. fiscal)
Jawboning (when an authority e.g. MacFarlane, Eadey Costello etc. says the exchange rate is undervalued/overvalued)

hope it helps

well Indirect intervention is essentially the same as macroeconomic policies, since monetary policy is a macroeconomic policy

and Raven - u could also talk about how current government policy doesn't necessarily consider a high CAD a bad thing, so long as economic growth remains relatively good, and inflation remains low, as it currently is (well growth is slowing since the last quarter, but just assume its growing)....however this is an issue u'll deal with later in the year..

 

[-=«MÄLÅÇhïtÊ»=-]

isn't fiscal direct?

 

[AGB]

i dont think so....fiscal policy isnt used to influence exchange rates, therefore it is not direct intervention

direct is when the activity is specifically intended to have an effect on the exchange rate (in this case). whereas changes in the exchange rate as a result of fiscal policy is almost a 'side effect'

 

[Raven]

Thanks for info. By the way,do you enjoy doing Eco at UNSW and are there good work opportunities after you finish uni?

Thanks in advace

 

[Raven]

++CORRECTION++

are there any good work opportunities after you finish uni?

Because so far, the best work opportunities are for people who

do Acturial Studies.They straight away get like 50 000+ and then

after couple of year 100 000+. So i am just curious about

economics degree and if its any good.

Thanks in advance.
P.S. sorry i changed subject,but i just want to start thinking about my career NOW and not in 5 months time.

 

[Minai]

lol
well I've barely started, and the subjects I'm doing arent that interesting yet - cos its like back to the basics...but it gets better in 2nd yr I'm told, cos ur actually learning new work and work that u are interested in (cos ur majoring in it - incidently I'm majoring in Economics and International Business)
but its pretty good, at least the work is interesting enough..

of course actuaries earn $hitloads, cos they work their asses off, but u have to love maths n finance to do well in that...if u do economics at uni, u dont necessarily end up as an "economist", only about 10% of eco graduates are economists, but its a good degree to get u into finance, stockmarkets, gov't bodies, reserve bank etc etc...im sure there's an employment prospects sheet somewhere..?

 

[timmii]

Minai, would you try and transfer into commerce/arts, or are you more than happy with eco/arts?

 

[Raven]

timmii.Just quick question,what course are you doing and what's your first impression of your chosen course?


Thanks in advance