Hsc Term 1

HSC economics topic 1:
AUSTRALIA’S PLACE IN THE GLOBAL ECONOMY 2010
TRENDS IN AUSTRALIA’S TRADE PATTERN
Direction of trade- the countries with which Australia exports to and imports from
Composition of trade- refers to the type of goods and services that Australia trades with other countries
+ Australia‘s main merchandise exports are primary goods (coal, goal, minerals).
+ Australia’s main merchandise imports are manufactures goods (cars, computers…)
THE BALANCE OF PAYMENT
BOP summaries all of Australia’s international transactions that result from the importing and exporting G/S and financial flows(investment & income)
Transactions are categorized as either CREDITS (capital inflow – positive) or DEBITS (capital outflow – negative)
Summarised into 2 main accounts in the BOP, either Current account or the Capital and financial Account
The current account
Shows the capital flows from all exports(X) and imports (M) of G&S, income and current transfers.
Net goods = exports income received – payments for imports
Balance => X=M
Surplus   => X>M
Deficit     => X inflow of income
Foreigner invests in Australia => Outflow of income
Net income = income credits – income debits
Net current transfer = payout on insurance, foreign aid not used to build infrastructure and pensions from foreign govt.
CAD = Credits (inflows) Debits (Outflows)
THE CAPITAL AND FINANCIAL ACCOUNT
Concerned with the financial assets and liabilities (the money flows from international borrowing, lending and purchase of assets(shares & property))
Recorded as credits and debits
2main account Capital Account & financial Account
Capital Account
People migrating in & out of Australia
Foreign aid used to build infrastructure
Purchase & sale of intellectual property (e.g. patents, copyrights, trademarks & franchise)
Financial account shows transactions in assets and liabilities
Includes direct, portfolio investment, other investment and reserve...