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Topic 4: Globalisation

3 dot points, in syllabus order. Each dot point has a focused answer, with exam-style questions and worked answers where available.

How are currency values and trade flows recorded?

Explain how exchange rates are determined and how transactions are recorded in the balance of payments.

An exchange rate is the price of one currency in terms of another, set by demand and supply in a floating system. The balance of payments records a country's transactions with the rest of the world.

8 min read →

Why do countries trade with one another?

Explain the gains from international trade using the theory of comparative advantage.

International trade lets countries specialise in what they produce relatively most efficiently. The theory of comparative advantage shows that trade can raise total output and benefit all trading partners.

7 min read →

Who gains and who loses from a more connected world?

Evaluate the economic, social and environmental effects of globalisation on Australia and developing economies.

Globalisation is the growing integration of economies through trade, investment, technology and labour flows. It brings gains such as growth and lower prices alongside costs such as inequality and structural unemployment.

8 min read →