HSC Economics Topic 1 Globalisation deep-dive quiz quiz

Adam Smith

John Maynard Keynes

Milton Friedman

David Ricardo

Country A, because its opportunity cost of one car (2 wheat) is lower than Country B's (3 wheat)

Country B, because it uses fewer total inputs per worker and so produces cars more cheaply overall

Country A, because it can produce more of both goods and therefore holds the advantage in every line

Neither country has a comparative advantage in cars, because absolute productivity is what actually matters

Higher revenue for foreign producers, who capture the tariff as a direct payment from domestic consumers

A deadweight loss because the rise in consumer prices exceeds the producer and government gain

An automatic appreciation of the domestic currency as import demand and the trade deficit both contract

An immediate fall in the domestic unemployment rate as protected industries rapidly expand their output

Was founded in 1944 at Bretton Woods

Lends to countries facing balance-of-payments crises

Replaced the GATT on 1 January 1995 and runs the Dispute Settlement Body

Finances long-term economic development projects in low and middle income countries

Around 25 percent

Around 15 percent

Zero

Around 5 percent

The International Monetary Fund

The World Trade Organization

The World Bank

The Bank for International Settlements

Lower the price of imported goods in AUD, easing cost pressures on Australian households and firms

Raise the international price competitiveness of Australian exports

Reduce imported inflation by making overseas goods cheaper for domestic consumers to purchase in AUD

Have no effect at all on the trade balance, since exchange rates and trade flows move independently

AUSFTA (the bilateral Australia-United States Free Trade Agreement)

ChAFTA (the bilateral China-Australia Free Trade Agreement)

RCEP (Regional Comprehensive Economic Partnership)

NAFTA (the North American Free Trade Agreement, now the USMCA)

A complete and permanent reversal of globalisation back to pre-1980 autarky levels since the 2008 GFC

The slow speed at which the IMF disburses emergency loans to member countries during a balance-of-payments crisis

Australia's deliberate withdrawal from major trade agreements in favour of a more protectionist domestic policy stance

The plateauing of world trade as a share of GDP and the partial reversal of US-China integration since 2008

FDI is a controlling stake (typically 10 percent or more) in a foreign enterprise; portfolio investment holds shares or bonds without control

FDI is always a form of short-term debt that must be repaid quickly, whereas portfolio investment is always long-term debt held for many years

FDI can only ever be undertaken directly by national governments, while portfolio investment can only ever be undertaken by private individuals

FDI is by definition denominated only in Australian dollars, whereas portfolio investment is denominated only in foreign currencies