>sweet candy<
Member
can someone explain to me the CAD
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Cad (1 Viewer)
- Thread starter >sweet candy<
- Start date
The CAD is just a term used to describe the balance on a nations Current Account. When the current account value is negative we get what is called a CAD. Essentially the CAD is just like a credit card statement
Australia is one of the many economies who experience CAD frequently and this has mainly been due to the structure of our economy. Our low levels of saving has resulted in us needing more foreign funds thus leading to our income debits blowing out of proportion. Our relatively low productivity and stronger economic growth has saw low exports gorwth and exponential imports growth...this has resulted in a deficit on out BOGS.
Should note that our income balance contributesto over 90% of our overall CAD balance. (e.g. in 2001-02 the CAD was $22bn, $20bn or which was linked to income flows).
Australia is one of the many economies who experience CAD frequently and this has mainly been due to the structure of our economy. Our low levels of saving has resulted in us needing more foreign funds thus leading to our income debits blowing out of proportion. Our relatively low productivity and stronger economic growth has saw low exports gorwth and exponential imports growth...this has resulted in a deficit on out BOGS.
Should note that our income balance contributesto over 90% of our overall CAD balance. (e.g. in 2001-02 the CAD was $22bn, $20bn or which was linked to income flows).
malayz_angel
Member
It stands for the Current Account Deficit. In layman's terms, it occurs when an economy spends more on its imports from overseas than it receives for exports to other countries. E.g. if Australia is getting $150 for wheat, but still spending $450 for imports, it would be an economic loss as more of Australia's money is going overseas than it is getting back. It is not necessarily a bad thing, however. Look up a guy called Pitchford if you get the time.
malayz_angel
Member
Pm me if that's not a good enough explanation, I'm just trying to keep it simple because when I was first trying to understand this, people were throwing all these long, complicated explanations and definitions at me and I was hating it. 