Economics Marathon - 2010 (1 Viewer)

[0bs3n3]

Probably during the GFC 2008... few months after the collapse in fact

Last time they publically intervened using monetary policy was around April 2000 I think. They raised interest rates to protect the stability of the domestic economy.

Goals of RBA:

Prosperity of the Australian people. Controlling inflation. One more I think?

 

[Failure_123]

Why are you guys helping your competitors???

 

[b00m]

Last time they publically intervened using monetary policy was around April 2000 I think. They raised interest rates to protect the stability of the domestic economy.

Perhaps using monetary policy, yes. But the RBA's website said they purchased $AUD.. somewhere in the vincinity of $30b/mil [wrong figure..] to put upward pressure on the AUD.. thus resulting in an appreciation.

Most recently, the intervention in cycle 3 was in response to disorderly market conditions in the months following the collapse of Lehman Brothers in September 2008.

http://www.rba.gov.au/mkt-operations/foreign-exchg-mkt.html#eight

Prosperity of the Australian people. Controlling inflation. One more I think?

Control the money supply [in circulation] , i believe

 

[showy]

Why are you guys helping your competitors???

Because my competitors are helping me.

 

[showy]

Perhaps using monetary policy, yes. But the RBA's website [or some place i researched] said they bought $AUD.. somewhere in the vincinity of $30b/mil [not sure correct figure] to put upward pressure on the AUD.. thus resulting in an appreciation.

That's right. They dirtied the float during the GFC by buying $A, though they don't usually use monetary policy to influence the currency.

 

[0bs3n3]

That's right. They dirtied the float during the GFC by buying $A, though they don't usually use monetary policy to influence the currency.

Oh right. I doubt it was revealed publically they were doing so at the time though?

Anyway, question:

What has been the direction and source of the majority of FDI?

 

[showy]

What has been the direction and source of the majority of FDI?

inflows or outflows?

 

[Failure_123]

inflows or outflows?

It's no wonder you need help.

 

[showy]

It's no wonder you need help.

Whatever you reckon mate. If you haven't got anything positive to contribute, then don't.

 

[kwongsta]

The Balance Of Payments is the record of all financial transactions between Australian and the rest of the world during a given time period.



4 UNIT maths
advanced chinglish (coz im chinese)
economics
legal studies
biology

 

[NEGROizzle]

Sigh, so many unnecessary posts (failure_123) fkn fgt.

QUESTION to keep it going

What is the role of the IMF??

 

[elliottjohnson]

S

What is the role of the IMF??

Its role is to maintain financial stability within the global economy, particularly in response to foreign exchange markets.


Explain the difference between investment flows and financial flows.

 

[elliottjohnson]

What has been the direction and source of the majority of FDI?

FDI is where companies establish or buy a controlling interest in a foreign subsidiary.

The Foreign Direct Investment into Australia has mainly come from the other developed countries such as the USA, Britain, China, Hong Kong, Japan, Singapore and New Zealand. This has increasingly been expanding since the late 1970's.

These countries have bought controlling interests in mining, agriculture, manufacturing and service industries ie. tourism, travel, accommodation.

All this has been caused by the introduction of the floating exchange rate which Aust. adopted in 1983. this lead to a more flexible process to trade and invest internationally by aust. companies.

 

[twistedrebel]

Explain the difference between investment flows and financial flows.

difficult one, but i ll give it a shot never the less (feel free to correct me, i am most likely wrong)

investment flows are in the form of protoflio or Foreign direct investment into an economy to make a return on the investment, in the form of profit, rent and dividend.
Financial flows are all money transactions includes speculative, aiming for a short term gain on the movements in the price of assets.

What is the biggest barrier to the completion of the Doha round of trade negotiations. Why do countries keep this barrier in place.

 

[NEGROizzle]

Im just guessing about the doha but is it the trading blocs such as the EU that have subsidies in their argriculutral industries and stuff and also didn't it get interupted by the GFC?

 

[nutcracker]

If you ask me, the biggest barrier is selfishness.

But more seriously, yeah, isn't it just the fact that the EU is unwilling to cut agricultural subsidies by more than 50%, whereas countries like Australia want it cut them by at least 60%? (They did so in order to protect their local agriculture industry from overseas competition) + The USA is unwillinig to cut farm subsidies (same reason) aaaand developing countries like Brazil & India want to exclude consumer goods from tariff cuts and not open up certain markets to overseas competition.

Was the Doha Round actually interrupted by the GFC, or did it just collapse because of disagreements? But the GFC did increase protectionist sentiments as governments wanted to protect their local industries and provided domestic assistance packages, etc.

Question: What are the benefits and costs of reducing protection?

 

[naren147]

O

 

[twistedrebel]

What are the benefits and costs of reducing protection?

Benefits to firms is that they have cheaper import prices on their inputs. They also have access to greater foreign markets, and a larger export market. Costs to the firms is that they have increased competition and face more international competition from overseas firms, and sometimes they are unable to compete and forced to downsize production or close down.

The benefits to Individuals is that they are able to access goods and services at a cheaper price and are also able to access greater variety of goods and services. Example in the 1970's consumers had choice of 70 models of motor vehicles, today they have access to over 320 models. The cost to individuals is that they might become structurally unemployed if they work in inefficient industries. (our class could only think of one cost lolol)

The benefits to governments is that they have increases in economic growth and higher rates of funds inflow into an economy. The costs to governments is that they lose revenue as tarrifs are cut. Governments also have to spend money for people structurally unemployed int he forms of unemployment benefits and job retraining. In 2005 the government implemented $747 million in a decade long program to help people structurally unemployed. Governments also have to face political consequences, as cuts in tarrifs might not be seen straight away. Costs of lower protection an be seen in structurally unemployed, closure of factories and well known business.

Explain recent trends in Australia's trade agreements.

 

[Alby8534]

Explain recent trends in Australia's trade agreements.

- ASEAN Australia NZ FTA - the largest FTA Aust has pursued as ASEAN+NZ = 20% of total trade. Commitment to substantial tariff reduction and elimination efforts and WTO commitments. (Feb 2009)
- SAFTA (Singapore): strengthen trade and investment links in addition to tariff elimination. Aims to increase access for Australian expoters, especially in services. (2003)
- CERTA (NZ)
- AUSFTA (US): covers a lot including goods, services, investment, financial services, telecommunications, competition-related matters, electronic commerce, intellectual property rights, labour and the environment. (2005)

Explain the effects of protection on firms, individuals and govt.

 

[lolitsme]

- ASEAN Australia NZ FTA - the largest FTA Aust has pursued as ASEAN+NZ = 20% of total trade. Commitment to substantial tariff reduction and elimination efforts and WTO commitments. (Feb 2009)
- SAFTA (Singapore): strengthen trade and investment links in addition to tariff elimination. Aims to increase access for Australian expoters, especially in services. (2003)
- CERTA (NZ)
- AUSFTA (US): covers a lot including goods, services, investment, financial services, telecommunications, competition-related matters, electronic commerce, intellectual property rights, labour and the environment. (2005)

Explain the effects of protection on firms, individuals and govt.

Im guessing its reduced protection so...

Firms - An reduction in protection will lead to firms needing to become more internationally competitive. If they cannot improve their competitiveness they may close down.

Individuals - Reduced protection affects individuals both positively and negatively. Since industries/ firms are not competitve enough within the global market they may therefore be forced to close down or cut costs by retrenching employees. Thus indivuduals will become structually unemployed. However reduced protection also brings along with it cheaper goods for consumers.

Government - A reduction in protection will mean that the government will earn less of tariff revenue however reduced subsidies can make up for this.

idk if this is too broad but what should i talk about when im discussing the impacts of globalisation on Australia.