Economics Net Foreign Liabilities

What does NFL stand for in economic terms?

• National Football League

• Net Financial Leverage

• Net Foreign Liabilities

• Non-Fixed Loans

What is the importance of Net Foreign Liabilities (NFL)?

• It indicates the cultural influence a country has on another.

• It is a key economic indicator reflecting the extent to which a country relies on borrowing from or selling assets to foreigners to finance its activities.

• It measures the total amount of money generated by a country's exports.

• It is used to calculate the gross domestic product (GDP) of a country.

What is an asset in economic terms?

• Something that you owe to someone else.

• A liability that needs to be paid off.

• What you own.

• A type of currency.

What is a liability in economic terms?

• A financial asset that brings in income.

• What you own.

• What you owe.

• A type of investment.

What does a high level of NFL suggest about Australia's economy?

• It indicates a strong reliance on domestic financing.

• It suggests that Australia relies heavily on foreign financing.

• It shows that Australia is immune to exchange rate fluctuations.

• It implies that Australia has a low level of external debt.

Why is monitoring NFL important for policymakers in Australia?

• It allows them to predict changes in the stock market.

• It helps them assess the sustainability of Australia's external debt and its ability to meet financial obligations in the short term.

• It helps them assess the sustainability of Australia's external debt and its ability to meet financial obligations in the long term.

• It is used to determine the country's gross domestic product (GDP).

What is essential for Australia to manage its net foreign liabilities?

• Decreasing domestic savings

• Promoting domestic savings

• Reducing long-term investment

• Decreasing productivity

Which of the following is NOT a policy aimed at ensuring sustainable economic growth and stability for Australia?

• Improving productivity

• Attracting long-term investment

• Promoting domestic savings

• Discouraging domestic savings

What is a possible consequence of a strong currency?

• It can lead to a trade surplus.

• It makes exports cheaper and imports more expensive.

• It can lead to a trade deficit.

• It has no impact on trade balance.

What effect does a weak currency have on a country's exports and imports?

• It makes both exports and imports more expensive.

• It makes exports more expensive and imports cheaper.

• It makes exports cheaper and imports more expensive.

• It has no effect on the prices of exports and imports.