2E notes:
1) trade transaction normally occur because each nation gains mutual benefits from the exchange, there are some products we need or want , but cannot produce at all and there are products that we need or want but cannot produce in sufficient quantity.
2) The goal of external stability is said to be achieved when the Australian economy can sustain a healthy level of international trade, which advantageous to Australia’s living standard , without presenting symptoms such as ; a unstable exchange rate, a large and unsustainable CAD anything greater than 3-4% of gdp is considered excessive net leakage. And a large increase in NFD
3) ^^^^^^
4) The BOP is a financial summary of all international trade transactions between the Australian and global economy , publish quartley by the ABS, the summary is expressed in $ terms.
5) Which summarises trade transaction that tend to have an immediate cash flow effect on the aus economy
Net goods , net services, net income, net transfers. Net goods are trade in tangibles , revenue from goods (good credits) minus spending upon import goods ( good debit) . net services=trade in intangible revenue from exports or services (service credits) minus spending on imports on services (service debits). Net income =flows of profit and interest . profits and interest received by Australian from investment/loan from overseas (income credit) minus profits and interest paid by Australia to overseas (income debit). Net transfers = one way / unrequited cash flows; one way flows in and out of our economy of cash for such things as gifts and overseas pensions.
8)the Cad means that for a given period of time debit transactions in the current A/c were greater than total credit transaction in that account, meaning that more money was being owed then being money being spent.
9) net foreign debt is Amount a country owes to other countries, either directly as result of government-to-government loans or indirectly...