International Transaction Flashcards
1
Q
what is represented by a ‘demand’ for our currency
A
All transactions that result in an inflow of money into the CA and FA
2
Q
what is an example (exports of a demand for currency transactions
A
- exports iron ore Aus > US: Aus receives back transfer in USD, Aus seller converts to AUD at bank (AUD is demanded by seller)
3
Q
what determines demand for our currency
A
exports of g/s
receipts of income from overseas
capital inflow (foreign investment into AUS)
4
Q
what is represented by a ‘supply’ of our currency
A
transactions that result in an outflow of money
5
Q
what is an example (imports) of a supply of currency transactions
A
imports US computer: if contract is in USD, Aus buyer converts AUD to USD to send payment (AUD is supplied by buyer)
6
Q
what determines supply of our currency
A
imports of g/s
payment of income overseas
capital outflow
