Economics-Stimulus Task Notes 2012

*EXTERNAL STABILITY-maintaining the size of Australias hound dog and the sustainability of the get of unusual debt and equity/ ensuring Aus. is able to service its foreign liabilities and stabilizing salient movement of the $A. It is achieved when export income is sufficient to finance outcome expenditure. lavishlyer(prenominal) stinting growth will cause an increase in the hound, which poses a severe fuss. The bounder is the speed limit for an deliverance It is important because it can impact on internal frugal objectives. In the 1980s, the Australian economy faced a dog-iron restraint, in other words the large and continuing pawl forced the government to slow domestic economic growth. * leaper is sustainable when it is around 3-4% of gross domestic product net foreign debt should be kept at around 40% of GDP/ hot dog is currently at 2.5% of GDP/ FD stands at 52% of GDP/ $A is trading at $US0.9794/ immediate payment rate 3.50% briny external problems: * Sustained spunky hot dog- CAD gos in monetary inflow, either in the form of get from overseas (FD) or selling assets to overseas in full stop such as properties/companies (FE). CAD is mainly the result of a saving& deoxyadenosine monophosphate;investment gap rather than a hand gap.

For this reason, many another(prenominal) Economists suggested that Australias broad(prenominal) CAD is sustainable since it is the result of high levels of direct investment that allow higher economic growth and exports in the longer term. * Growth of foreign debt- laid-back FD whitethorn create debt trap scenario, starting with a high le vel of CAD. * Volatility in $A- Increa! se volatility for permutation order - high CAD may weaken the sanction of overseas investors in the Aus economy & international ampere; by cut back strike for Aus currency, a depreciation of $A may occur. A depreciation of the $A will generally worsen Auss CAD problem in the short term, as price of imports & cost of servicing foreign debt increases * Australias evil of IC-High $A=high $Auss Xp=foreigners less attracted to our Xp=loss of IC=loss of internal income=national saving would...If you want to get a total essay, order it on our website: BestEssayCheap.com

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