UNIT 2 AOS 2

Question 1

$AUD Depreciates

Answer 1

= Aust exports appear cheaper
= 😊 exports
= ↑XM (exports relative to imports)
= ↑ AD
= ↑PRODUCTION
= ↑ increase growth through particular industries

Question 2

Economic activity (falls)

locally

Answer 2

= Aus GDP falling
= production falling
= export production falls

Aust’s International competitiveness is compromised

Question 3

Inflation (high)

locally

Answer 3

= prices are high
= high COP
= firm passes COP to consumers

Aust’s International competitiveness is compromised

Question 4

trading partners GDP (falls)

Globally

Answer 4

= ↓demand for AUS exports
= ↓ production in related industries

Question 5

trading partners inflation (low)

Globally

Answer 5

= ↓imports 😊
= ↑ import demand (😊/☹)

Question 6

Commodity prices (↑)

Answer 6

• ↑ Incomes
  
  • ↑ Spending money (C and I)
  • ↑Eco activity
  • ↑ AD
  • Good for short term (inflation long term)