Balance of Payments - Current Account

[no steez]

Can someone write a step by step guide on how to calculate the net income plus net transfers and the current account balance?
Thanks

[chasej]

MrWood is probably the best readily available source for VCE eco on the internet.

The explanation of the CAD from this page really helped me with it: http://economics.mrwood.com.au/unit3/extstab/extstab2.asp

External Stability is a little harder than the other goals I'm finding.

[no steez]

MrWood is probably the best readily available source for VCE eco on the internet.

The explanation of the CAD from this page really helped me with it: http://economics.mrwood.com.au/unit3/extstab/extstab2.asp

External Stability is a little harder than the other goals I'm finding.

cheers mate, yeah external stability sac next Tuesday. It's definitely more challenging 

[dantan]

The calculation element of External Stability is the least important in my opinion. It's all about understanding the links between CAD, NFD and $A etc. rather than the actual balances and monetary values.

[chasej]

The calculation element of External Stability is the least important in my opinion. It's all about understanding the links between CAD, NFD and $A etc. rather than the actual balances and monetary values.

What do you mean by links?

Do you mean we need to know that the NFD is a running total of all the CAD's we have accumulated over the years? Also how does the exchange rate come into the equation with this?

[dantan]

Ok that statement was really poorly worded. Basically, what I'm trying to get at is the fact that the crux of external stability isn't within the calculations at all (so it's not actually that important to know a lot of it) but with the understanding and analysis of how the NFD, CAD and $A all operate, and how they relate to one another. E.g. Bigger NFD needed to finance a bigger CAD, Increased $A leads to bigger CAD, that kind of thing, rather, than the actual numbers.