exchange rate
Mystery; you can take or let another group take
Loss 100 points :(
NZ's export receipts increase by $500 million while import payments increase by $800 million. What happens to the current account balance?
It will worsen by $300 million.
Define a price taker
A price taker is a buyer or seller who must accept the market price because they lack the market share or power to influence it
What does a two country model show?
It shows how international trade, specialization, and market prices affect two separate economies through comparative advantage and supply-demand interactions.
what is a tariff?
Goods on import / a tax for imported goods
What causes a depreciation of a currency?
A decrease in demand and/or An increase in the supply
What are the factors in the formula to get the current account balance
Current Account Balance = goods balance + service balance + primary income balance + secondry income balace
If the world price is above the equilibrium is the country exporting or importing?
The country is exporting
If New Zealand imports goods from Australia, what happens to the demand of New Zealand dollars?
Supply of NZ goods increase
What is a free trade agreement?
a legally binding treaty between two or more countries to reduce or eliminate trade barriers
What happens when the nz interest rate increase?
Answer: Demand increases and supply decreases
What is a current account deficit?
When more money flows out of a country than flows in through the current account.
swap
You are forcefully swap with any group of your choosing
win 100 points :O
What happens when there is more quantity demand than quantity supplied in a country?
there would be a shortage
Is it good for either exporters or importers when the exchange rate appreciates
importers benefit as import payment increase, whilst exporter lose as less foreigners are willing to pay at a higher price.
what is nz current account balance?
A deficit of $4.6 billion
Why is New Zealand a price taker?
Because NZ supply would not be significant enough to affect the world price.
Mystery; must take
rock paper scissor with someone of another group, if won win 400 if lose the other get 200
Who are the top five countries New Zealand exports to?
China, United States, Japan, Australia, South Korea
Are domestic producers happy when NZD depreciate?
is nz an exporter of live cattle?
NO, The export of livestock—including cattle, sheep, deer, and goats—by sea is completely prohibited with no exemptions. Ministry for Primary Industries (MPI) and is restricted to breeding stock rather than animals intended for slaughter.
Mystery; take it or forceful give it to another group
for 200 points you must give 250 points to everyone else. (take it or leave it)
New Zealand exports significant amounts of dairy products, including milk and milk preparations, to South Korea. What would happend to export receipts if korea had an increase for demand of milk?
500 if said increase in export receipt, 600 if fully explain (qd decrease & qs increase)
mystery; take it or leave it
Gain 300