help on CAD (1 Viewer)

[fortitude]

help!!
we're doing an essay on "Australia's Balance of Payments" for eco [stating the obvious but anyway...] at schooL and i seriously need help......
"Topic: Balance of payments issues(underlined) in the Australian economy and current government economic policies(underlined) to manage the issues." to be more specific

any help with the following would be GReaT:
1. Causes (for the deficit)
2. Economic impacts (of high the deficit? i presume... cuz they ask for contempory thingz, and we've been having deficits... correct me if im wrong........)
3. Current government economic policies which deal with the balance of payment issue
- specificly mentioning macoeconomics [fiscal policy], policies [monetary, prices and incomes and trade policies], microeconomic policies, labour market policies
- just the main ones

AnY help with this would be GReatLy appreciated [- esp. with gov policies... giving me a headache.........................]

oh yeah... theres also definitions, structure and trends...
im pretty sure on these, but if theres anything special you think i should really mention in the essay then that would be really helpful

i can't thank you enough for the help, thnx

 

[Rafy]

Hmm its 5am, but here i go anyway

1. Causes.

Here you have to explain the various reasons for the BOP ISSUES currently facing our economy. i.e the causes of our Current account deficit (CAD) why is the CAD as bad as it is? (6.2% of GDP or something) also reasons for our high foreign debt and liabilities (mainly due to servicing the CAD, as australians are low savers) etc etc

2. Yes its a contempory look at the situation. As i said, the CAD is at historic highs. look at the impact this has on the economic indicators, confidence etc....

3. The microeconomic policies = Long term structural change to increase agregate supply. The key term with mirco is efficency. i.e Labour market and trade policy both aim to improve efficency (i.e we can compete better with foreign producers, which helps narrow the CAD.)
AS for macro..... monetary uses Interest rates, the level of IR will have a direct effect on investment etc, as well as influence the value of the currency. fiscal, can reallocate resources more efficently etc

Hopefully that should give you a few pointers and give you some idea on what to look up..

 

[fortitude]

thnx for your help, help me understand ALOT better
now all i gotta do is remember the info and put pen to paper
thnx again..

 

[haru]

Hmm its 5am, but here i go anyway

1. Causes.

Here you have to explain the various reasons for the BOP ISSUES currently facing our economy. i.e the causes of our Current account deficit (CAD) why is the CAD as bad as it is? (6.2% of GDP or something) also reasons for our high foreign debt and liabilities (mainly due to servicing the CAD, as australians are low savers) etc etc

Can narrow export base included in the causes?

 

[Riviet]

You could also talk about that problem of spending>savings in the economy, where Australians borrow from overseas more than they lend overseas.

 

[sunjet]

Policies: Tax on consumption, 06 Budget = Superannuation surchage removed, Fiscal Surplus to retire public debit.

 

[Rekkusu]

@haru: Yes it can, because that's a structural problem, an ongoing issue indeed.