Global Economy
The process by which trade, investment, finance, technology, and labour markets are increasingly interconnected across national borders.
What is globalisation?
This account records trade in goods and services, net primary income and net secondary income
What is the Current Account?
This is calculated as the number of unemployed people divided by the labour force, multiplied by 100.
What is the unemployment rate?
The Reserve Bank of Australia implements monetary policy by setting a target for this interest rate.
What is the Cash Rate?
Spell this key seven-letter word meaning a sustained rise in the general price level.
What is INFLATION?
This organisation administers global trade rules and provides a forum for negotiating trade agreements and settling disputes.
What is the World Trade Organisation?
When the Australian dollar appreciates, this becomes cheaper for Australian consumers, ceteris paribus.
What are imports?
This is a measure of the distribution of income within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).
What is the GINI Coefficient?
The principle that a country should specialise in producing the goods or services it can produce at the lowest relative opportunity cost, leading to gains from trade.
What is Comparative Advantage?
These are the five components of aggregate demand
What are consumption, investment, government spending, exports and imports?
This argument for protection claims that new domestic firms need temporary support until they achieve economies of scale.
What is the infant industry argument?
This index measures the average value of the Australian dollar against a basket of currencies weighted according to Australia’s trade shares.
What is the Trade Weighted Index (TWI)?
With a marginal propensity to consume of 0.8, this is the value of k.
What is 5?
He is referred to as the founder of modern macroeconomic theory.
Who is John Maynard Keynes?
A country records exports of $420 billion and imports of $390 billion. Calculate its balance on goods and services.
What is a surplus of $30 billion?
This indicator combines life expectancy, education and income to compare economic development.
What is the Human Development Index (HDI)?
A rise in export prices relative to import prices is described as this movement.
What is an improvement in the terms of trade?
This is the inflation that occurs where an increase in aggregate demand leads to rising demand without rising output
What is Demand-pull inflation?
This is the graph that shows the trade-off between inflation and unemployment.
Phillips Curve
DIAGRAM CHALLENGE:
In 30 seconds, draw and label the effect of a tariff on the domestic price, imports, consumer surplus and government revenue.
What is a tariff diagram showing a higher domestic price, reduced imports, lower consumer surplus and tariff revenue received by the government?
The theory that in the long run, exchange rates adjust so that identical goods cost the same across countries once currency values are accounted for.
Purchasing Power Parity
This account includes the acquisition and disposal of non-produced, non-financial assets
What is the Capital Account?
DIAGRAM CHALLENGE: Draw a diagram showing the effect of microeconomic policy.
What type of policy increases aggregate supply?
This is the result of individuals acting in their own self-interest and overusing a shared, non-excludable resource
What is the Tragedy of the commons?
These are the five channels of monetary policy transmission.
What is S+I, cash flow, asset-price and wealth, exchange rate and inflationary expectations.