Please help with other questions (1 Viewer)

[Fairytale]

1. Explain the link between the CAD and Australia's Net External Debt.

2. Suggest two reasons why women are generally worse off than their male counterparts. This is in relation to the inequality in income distribution between men and women.

3. Describe two Australian government policies that address the unequal distribution of income/wealth.

4. How successful have Australian governments been in their policies that address the unequal distibution of income.

5. Identify two reasons why the bottom quintile receives such a low share of national income. related to the Lorenz curve.

6. How would a decrease in Real GDP growth affect the CAD?

 

[ToO LaZy ^*]

hey!...you're that avon rep.!..haha, just remembered

brief overview...
6. decrease in real GDP growth
---> contraction in demand and supply
---> decreases output
---> decreases the need for factors of production (eg labour)
---> decrease in employment
---> decrease in disposable income
---> further contraction of economy
---> leads to the weakening of the $A
---> leads stronger international competitiveness (?) (exports dearer and imports cheaper), and because imports are cheaper, demand is high for imports leading to increase in funds sent to foreign countries which in turn upset our CAD. (increasing our foreign debt)
the government may not be able to fund the foreign debt and may have to borrow MORE funds from foreign countries in which principle and interest will eventually be paid back*
(borrowing funds to cover the debt = more debt)



*there is a technical term used for this, can't remember at this point

 

[ToO LaZy ^*]

Originally posted by Fairytale
1. Explain the link between the CAD and Australia's Net External Debt.

5. Identify two reasons why the bottom quintile receives such a low share of national income. related to the Lorenz curve.

6. How would a decrease in Real GDP growth affect the CAD?

umm..these questions should be easily found in your text book, if you can't find them, then you're not really looking hard enough
like i said before...please do a LITTLE bit of research yourself before posting a whole bunch of questions
don't mean to be bitchy tho

 

[i-color]

I'm only going to answer your questions briefly because most of them are relatively big topics that are covered in detail in your textbook...

1. Net foreign debt is part of KAFA, and using offsetting quality between Current account and KAFA --> inflow of foreign debt into australia causes a larger KAFA surplus, which is offset by a higher CAD. Also, net foreign debt means we have to pay interest on these debts to overseas, which is included in the net Y component of CAD......therefore higher debt --> higher CAD


2. This is most probably due to society's expectations and views of women in the workforce. There is really no economic argument for the wage inequality between men and women --> just teh glass ceiling

3. Main policy is fiscal policy through the progressive tax system and welfare payment. Also structural change/micro reform which give people incentive to increase their skills etc --> reduced inequality between occupations and skills etc

4. Not very successful- evidence is that gini coefficient has increased throughout the years. However, govt policies in achieving sustainable rate of eco growth has benefited EVERYONE in absolute terms. So although relative poverty has increased, in absolute terms everyone has benefited from govt policies

5. Main reasons include: lack of skills/education/training/experience --> self perpetuating poverty cycle; lack of motivation to work etc etc (this should be textbook stuff)

6. already answered above

 

[aditya]

kafa = wat?

 

[i-color]

capital financial account