Trade, the Balance of Payments & Terms of Trade

What this note covers

1. Why nations trade: the gains from international trade
2. Trade liberalisation: opening the Australian economy
3. The balance of payments: structure of the accounts
4. What moves the accounts: cyclical and structural factors
5. The terms of trade: meaning, measurement and what drives them
6. Effects of TOT movements on the macro goals and living standards

6 sections · 14 key terms & formulas · 6 common mistakes