random shit to know

Question 1

APEC

Answer 1

Asia-Pacific Economic Cooperation = multilateral free trade agreement btw 21 countries founded in 1989
- AUS, China, Japan, US

Question 2

how to finance budget deficit

Answer 2

• overseas borrowing
• private sector borrowing by selling CGS’ in the domestic financial market
• selling government assets
• monetary financing as the government sell CGS’ to the RBA, which the RBA is obliged to buy using printed money
  (most to least common)

Question 3

private sector borrowing to finance deficit

Answer 3

advantages:
- no change in money supply as the money borrowed gets returned to the private sector through government spending in the budget.
- no contribution to foreign debt
disadvantages:
- ‘crowding out’ of financial investment and higher interest rates

Question 4

monetary fincancing/ =borrowing from RBA to finance deficit

Answer 4

advantages:
- no change in interest rates
disadvantages:
- increase money supply = high inflation

Question 5

overseas borrowing to finance debt

Answer 5

advantages:
- no increase in domestic interest rates
- no public debt
disadvantages:
- net foreign debt accumulates
- CAD worsens

Question 6

selling gov assets to finance debt

Answer 6

advantages:
- demand for funds remains the same
disadvantages:
- doesn’t reduce fiscal deficit as these are adjusted to reflect one off transactions

Question 7

how to use a budget surplus

Answer 7

• reduce public sector debt
• pay overseas debt
• part savings part spending
• accumulate surplus = depositing it with the RBA and gaining interest, or placing it in a specially established, government-owned investment fund
  (most to least common)

Question 8

reduce public sector debt with budget surplus

Answer 8

advantages:
- future debt obligations reduced
- reduces debt servicing costs on CA

Question 9

repay overseas debt with budget surplus

Answer 9

advantages:
- reduction in the part of the net external debt
- reduces debt servicing costs on CA

Question 10

accumulate surplus with budget surplus

Answer 10

advantages:
- accumulate surplus and use to finance future expenditure

Question 11

example of part savings and part spending of budget surplus

Answer 11

The Howard Budget eliminated Commonwealth general government net debt from a peak of $96281 or 17.6% of GDP, to -$4531m of net lending or -0.5% of GDP. Part of the accumulated budget surpluses in 2006-07 and 2007-08, were deposited in the Future Fund

Question 12

NaFTA

Answer 12

North American Free Trade Agreement = regional free trade agreement and trilateral trade bloc in North America.
- US, Canada and Mexico
- signed 1992
- eliminated most tariffs

Question 13

RCEP

Answer 13

Regional Comprehensive Economic Partnership = free trade agreement among the 15 Asia-Pacific countries
- Aus, China,
- list tariffs on 92% goods
- aus signed 2021
- 30% of GWP

Question 14

AANZFTA

Answer 14

ASEAN-Australia-New Zealand Free Trade Area
- ASEAN (10 members) + NZ and AUS
- aus signed 2010

Question 15

TPP

Answer 15

Trans-Pacific Partnership = 12 pacific rim countries including AUS –> not in effect
replaced by Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Question 16

4 categories of income

Answer 16

EARNED from FOP
- wages/salaries = labour
- interest = capital
- rent = land
- profit/dividend = entrepreneurship/enterprise

UNEARNED
- transfer payments
- winning lottery

RANKING as % of income:
1. labour
2. transfer payments
3. capital and land
4. enterprise

Question 17

WB

Answer 17

The International Bank for Reconstruction and Development (IBRD) = lends to governments of middle-income and creditworthy low-income countries.
and
International Development Association (IDA) = provides interest-free loans – called credits – and grants to governments of the poorest countries.