Topic 2: Australia's Place in the Global Economy
4 dot points across 1 inquiry question. Click any dot point for a focused answer with worked past exam questions where available.
How does Australia engage with the global economy and what is its position relative to other economies?
- Examine the structure of Australia's balance of payments including the current account and the capital and financial accounts, and analyse the links between them
A focused HSC Economics Topic 2 answer on the balance of payments. Defines the current account (BOGS, net primary income, net secondary income, net services) and the capital and financial account, explains the accounting identity, and analyses the causes of Australia's persistent current account deficit and recent surplus.
8 min answer → - Examine the composition and direction of Australia's trade and financial flows including the changing trade and investment partners, the changing direction of trade, and the impact of Australia's free trade agreements
A focused HSC Economics Topic 2 answer on Australia's trade. Identifies the composition (commodities dominate exports, manufactures dominate imports), the direction (East Asia, especially China), the 17 free trade agreements, and the evolution of trade flows since the 2000s.
7 min answer → - Investigate Australia's international financial linkages including foreign debt, the foreign debt to GDP ratio, foreign equity, net foreign liabilities, and the implications of these for the Australian economy
A focused HSC Economics Topic 2 answer on international financial linkages. Distinguishes foreign debt from foreign equity, defines net foreign liabilities and the debt-to-GDP ratio, and analyses the benefits and risks of Australia's net liability position with current ABS data.
7 min answer → - Examine the determination of the Australian dollar exchange rate including the influence of demand for and supply of the Australian dollar, the foreign exchange market, and the influence of speculation and Reserve Bank intervention
A focused HSC Economics Topic 2 answer on the AUD exchange rate. Defines floating, fixed and managed regimes, draws the foreign exchange market with demand and supply, identifies the seven major determinants of the AUD, and works through the effects of a depreciation on trade, inflation and the BoP.
9 min answer →