Australia's Trade and Financial Flows (HSC SSCE Economics): Flashcards
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IMF medium-long term CAD threshold (% of GDP)
IMF medium-long term CAD threshold (% of GDP)
Over 4% of GDP
IMF short term CAD threshold (% of GDP)
IMF short term CAD threshold (% of GDP)
Exceeding 6% of GDP
Risk premium
Risk premium
Extra interest rate for lenders due to perceived risk
Balance of payments constraint
Balance of payments constraint
CAD limiting how fast economy can sustainably grow
Net primary income account records
Net primary income account records
Interest, dividends, and profit flows
Two components of foreign liabilities
Two components of foreign liabilities
Foreign debt and foreign equity
IMF sustainable CAD for Australia (% of GDP)
IMF sustainable CAD for Australia (% of GDP)
2.5-3% of GDP
Sustainable net foreign liabilities for Aus (% of GDP)
Sustainable net foreign liabilities for Aus (% of GDP)
Around 55% of GDP
Effect of high CAD on exchange rate
Effect of high CAD on exchange rate
Downward pressure causing depreciation
Result of currency depreciation on imports
Result of currency depreciation on imports
Imported inflation as cost of imports rises