the Global Economy
|
the Global Economy |
|
The focus of this topic is an examination of Australia's place in the global economy and the impact of changes in the global economy on Australia's internal and external stability. (Economics Stage 6 Syllabus)
Glossary of Terms
|
TERM |
DEFINITION |
|
Appreciation |
A rise in the free-market
exchange rate of the domestic currency with foreign currencies. |
|
Balance
of Payments |
A complete statement of all
transactions between one country and the rest of the world in any specific
period. |
|
Capital
account |
The record of all financial
transactions involving Australian claims on and liabilities to foreigners.
|
|
Capital
flight |
The sudden withdrawal of funds
from a country. |
|
Current
account |
A record of receipts from the
sale of goods and services to foreigners, the payments for goods and
services bought from foreigners, and property income (such as interest and
profits) and current transfers (such as gifts) received from and paid to
foreigners. |
|
Depreciation |
A fall in the free-market
exchange rate of the domestic currency with foreign currencies. |
|
Effective
rate of protection |
The
effective rate of protection of an industry is defined as the percentage
by which all of a nation’s trade barriers raised the industry’s value
added, per unit of output. |
|
Financial
account |
The record of all transactions in
financial assets and liabilities between Australians and foreigners. |
|
Fixed
exchange rate |
An exchange rate which is pegged
by the country's central bank. |
|
Foreign
Debt |
There are two measurements of the
Foreign or External Debt. They are:- Gross Foreign Debt, ie the total
borrowings by Australian residents from non-residents. Net
Foreign Debt, ie the Gross Debt minus Australia’s holdings of foreign
reserves, and gold, and lending Australian residents have made overseas. |
|
Foreign
exchange market |
The
market in which the currencies of different countries are exchanged for
one another. It is also known as the FOREX market. |
|
International
competitiveness |
The
price and non-price advantages an industry or country has over foreign
competitors. |
|
J
Curve |
The effect of a currency
devaluation on the balance of goods and services. It generally applies in
a fixed exchange rate system. |
|
Managed
float |
Actions of the central bank to
intervene in the foreign exchange market to influence the value of the
currency. |
|
Market
operations |
Reserve
Bank activity in the money market, in implementing monetary policy,
through targeting the cash rate. |
|
Real
interest rate |
The nominal interest rate
adjusted to compensate for inflation. |
|
Structural
change |
The
larger and more lasting adjustments which occur in the structure of
production in the economy; for example, changes in the relative size and
characteristics of industries.
|
|
Terms
of trade |
The terms of trade is the ratio
of a nation's export price to their import price. When the terms of trade
improves (increased export prices relative to import prices) a nation is
better off, as it can buy more imports with the same level of exports. A
worsening of the terms of trade means a nation must sell more exports to
purchase the same quantity of imports. |
|
Trade
Weighted Index |
A weighted average exchange rate
expressed as an index, where the value of the index is 100 in a specific
base year. This is the main measurement of Australia's exchange rate
compared to its main trading partners. |
|
W
Curve |
The effect of a currency
depreciation followed by an appreciation in a floating exchange rate
system. |
The use of current information and statistics is very important to economics. In order to find up to date statistics, the Australian Bureau of Statistics has most of the statistics you will need in your study. Statistics range from the unemployment rate, to the consumer price index.
Australian Bureau of Statistics - http://www.abs.gov.au
The OECD site contains data on main economic indicators around the world, economies in transition, labour force and agriculture statistics, National Accounts, trade in goods and services, and Economic Outlook.
The World Trade Organization (WTO) site includes current news, a newsletter, articles, and information on trade topics, for example electronic commerce, the environment and intellectual property.
The Worldbank site contains information on global economic prospects, publications, newsletters and current news.
The International Monetary Fund site contains data on Government Financial Statistics, Country Information, Finance and Development information, as well as publications and articles. The World Economic Outlook is especially useful as well as individual country profiles.
The Asia Pacific Economic Corporation (APEC) - The APEC study centre site includes information on APEC and its role, publications and study materials.
The Human Development Report can also be interesting as well as full of information. On the site information includes National Income Accounts, as well as statistics on health, the environment, trends in economic performance, and more, on both developing and industrialised nations.
The US Central Intelligence Agency (CIA) apart from playing spies also provides a very good information source about living standards and the economies of many countries, including Australia, in their CIA Factbooks. These can be found at
The Reserve Bank of Australia site has many articles, speeches and statistics that are relevant to the value of exchange rates and Australia's external performance.
The Australian Department of Foreign Affairs and Trade site includes information on the governments trade policy as well as an Annual Report on Trade and Foreign Affairs.
The Productivity Commission site provides information on the level of protection in various industries in Australia and the impact of changes in levels of protection.
Productivity Commission - http://www.pc.gov.au
Some excellent articles on Australia's Place in the Global Economy can be found at
The National Library of Australia has a number of sources of economic articles and statistics on its website at
Useful resources for this topic and other topics in the HSC course can be found at:
The site contains information about two excellent workbooks that provide activities for students to do (with the answers), as well as practice multiple choice questions. Students and teachers can purchase these books from the site.
There are also overhead masters available on the HSC topics. These are an excellent source of information and a great time saver for teachers.
Go to HSC Topic 3 - Economic Issues
Return to HSC Economics homepage
Last modified 26th August 2006
Comments and enquiries to Tony
Stokes