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Year 12 Recap - Trade

Year 12 Recap - Trade

This Year 12 Recap video covers the basics around the topic of trade.

The trade balance of a country provides an important indicator of how competitive a country is with the rest of the world. In many economics exam papers, there will be an essay question testing students knowledge of the trading relationship between countries and how a change in this relationship will affect the relative performance of the economies. Therefore students need to be confident with the terminology surrounding trade and the factors which cause a country to run either a surplus or a deficit.  

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Year 12 Recap - Balance of Payments

Year 12 Recap - Balance of Payments

This Year 12 Recap video covers the basics around the topic of the balance of payments.

The balance of payments is a collection of individual trading accounts which measure how dependent an economy is on the rest of the world to satisfy its needs and wants. The accounts can be used to assess the external competitiveness of a country with the rest of the world. In an exam situation, students need to understand the basic structure of the balance of payments accounts to be able to appreciate that there is an inverse link between the performance on the current account and the financial account. By understanding the basic principles of this trading account, a student can start to analyse in more detail the impact of an exchange rate, interest rate and inflation rate change on the performance n competitiveness of an economy.

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