When a country or individual has can produce a good using fewer resources than another country or individual

When an individual, a firm or a nation is able to produce a particular product at a lower opportunity cost than another individual, firm or nation. Forms the basis on which nations trade with one another.

When a government or a central bank intervenes in the market for its own currency to weaken it relative to another currency or currencies. May be achieved through measures such as reducing domestic interest rates, selling the currency on foreign exchange markets, or imposing foreign exchange controls that limit the amount of foreign investment in the country, reducing demand for the currency abroad.

When a government or central bank intevenes in the market for its own currency on foreign exchange market to raise its value relative to another currency or currencies. Measures may include raising domestic interest rates, purchasing the currency using foreign exchange reserves, or restricting the outflow of capital for foreign investment (exchange controls).

An arrangement among nations that typically includes the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies.

A type of trade bloc which is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production (capital and labour) and a common external trade policy.

An increase in the value of one currency relative to another, resulting from an increase in demand for or a decrease in supply of the currency on the foreign exchange market.

A decrease in the value of one currency relative to another, resulting from a decrease in demand for or an increase in the supply of the currency on the forex market.

An aim of government policy to promote sustainability of the external accounts so that Australia can service its foreign liabilities in the medium to long run and avoid currency volatility. Goals include a stable exchange rate, and a sustainable level of foreign debt and current account deficit.

Internal stability – low inflation (price stability) and full employment

The amount of land, labour, capital, and entrepreneurship that a country possesses and can exploit for manufacturing.

A fixed exchange rate is a regime applied by a government or central bank ties the country's currency official exchange rate to another country's currency or the price of gold. The purpose of a fixed exchange rate system is to keep a currency's value within a narrow band.

When a currency’s price relative to other currencies is determined by the free interaction of supply and demand in international forex markets.

When a government or central bank takes action to manage or fix the value of its currency relative to another currency on the forex market.

The exchange of goods and services between different countries undertaken without any government intervention.

The emerging inter-connectedness of the world’s national economies and cultures

A rate of growth which can be maintained without creating other significant economic problems, especially for future generations. There is clearly a trade-off between rapid economic growth today, and growth in the future.

A model of the macroeconomy that shows the interconnectedness of businesses, households, government, banks and the foreign sectors in resource markets and product markets. Money flows in a circular direction, and goods, services and resources flow in the opposite direction.

The pattern of world trade. Trade is the exchange of goods and services between countries. Goods bought into a country are called imports, and those sold to another country are called exports.

A firm which operates in more than one country.

A regional trading bloc is a group of countries within a geographical region that protect themselves from imports from non-members. Trading blocs are a form of economic integration, and increasingly shape the pattern of world trade.

An organization aimed at liberalizing trade by facilitating the reduction or elimination of trade barriers between member states.

An international agency which makes soft loans to less economically developed countries, mostly for infrastructure projects or other investments which improve the physical or the human capital of the developing country.

When the price of a nation’s exports rises relative to the price of its imports. May result in an improvement in the current account balance if demand for the country’s exports is inelastic relative to its import demand, or a worsening in the current account balance if export demand is elastic relative to import demand.

The difference in value between a country's imports and exports.

When the value of a nation’s imports from abroad exceeds the value of the exports from that nation to the rest of the world.

Measures the balance of trade in goods and services and the flow of income between one nation and all other nations. It also records monetary gifts or grants that flow into our out of a country.

An agreement between two or more nations to reduce or eliminate barriers to trade across member states. Meant to achieve a more efficient allocation of resources between nations and a larger market for member nation’s exports, as well as a larger variety of goods for domestic consumers to enjoy.

The use of tariffs, quotas or subsidies to give domestic producers a competitive advantage over foreign producers. Meant to protect domestic production and employment from foreign competition.

A group of 28 countries in Europe that operates as a cohesive economic and political block.

A regional intergovernmental organization comprising ten countries in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, military, educational, and sociocultural integration among its members and other countries in Asia.

Australia's first multi-country free trade agreement (FTA).

The human and natural resources needed to produce any good or service: Land, labor, capital and entrepreneurship