Eco lol

Topics: Investment, International economics, Macroeconomics Pages: 4 (1030 words) Published: July 26, 2014
Economics Summary Chap 4&10
Chapter 4: Australia's trade and financial flows
Chapter 10: External Stability
Overview Chapter 4:
Understanding Australia's place in the global economy
Trends in Australia's trade patterns
Trends in Australia's financial flows
The balance of payments
TRENDS in Australia's balance of payments
Consequences of a high current-account deficit
Overview Chapter 10, External Stability:
Australia's current account deficit
Australia's foreign liabilities
Australia's exchange-rate
Policies to achieve external stability
Chap 4, Part one: Understanding Australia's place in the global economy (p102) To understand the impact of change in the global economy on Australia we need to look at links between Australia and the global economy. This requires an analysis of Australia's trade patterns and trade policies, our financial relationship with overseas countries and influence of the exchange rate on structure and performance of the Australian economy. Trends in Australia's trade patterns

Trade has always represented a high proportion of Australia's economic activity. we are referred to as a small, open economy with export around 20% of what we produce and M equivalent of 20% GDP. As a result, although Australia does not influence the World economy but world economic development can have an impact in Australia. The changing direction of trade:

When the UK joined the EEC in 1973 Australia looked to Japan to trade. In the 1980s when the Japanese economy began to slow, Australia's trade shifted towards the emerging economies in Asia. Since 2007 China has been Australia's largest trading partner.

Changing composition of Australia's trade:

Trends in Australia's financial flows:
Financial flows began growing rapidly in the 1970s as international capital markets opened up, exchange rates were floated and technological changes made it easier to shift finance between countries. Direct investment is the establishment of a...
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