Australian TOT(Terms of trade) Essay Example | Topics and Well Written Essays - 1250 words

Australian TOT(Terms of trade) - Essay Example On the other hand, a TOT value greater than 100% implies that the country is accumulating capital or more money is coming into the country from the exports. If the TOT of a country improves (rise above 100), it means that for each export unit sold it can be able to buy more units of the imported goods. Therefore, a rise or increase in the TOT creates a benefit in terms of the number of goods required to be exported in order to purchase a particular amount of imports. Improving TOT can also contain a valuable effect on the domestic cost-push inflation because an improvement shows falling import prices relative to the prices of exports. However, a country can undergo suffering in terms of the falling export volumes and a deterioration payments balance. Contrary to the indications of an increasing TOT, a deteriorating TOT (decreasing below 100) shows that a country needs to export increased amount of goods in order to buy a particular quantity of imports.1 Australian TOT Between the yea r 1998- 1999 and the year 2008 to 2009, the TOT of Australia have undergone or went through an unprecedented rice of 75% indicating the alterations in both the composition and prices of traded services and goods. The prices of exports grew by 86% whereas that of imports grew by 9%. The increase or rise in the prices of exports was driven by the rise in metal ores and coal while the decrease in prices of most manufactured goods assisted in keeping the import prices down.2 In the year 2011, the TOT peaked rising to a level of 105% above the preciously prevailing values from the year 2002. This particular boom in TOT was attributed largely to the staggering high prices that the foreign buyers were paying for commodities such as iron, gas, and coal. Holding down of the import prices by the recorded high Australian dollar also boosted the TOT. In the month of December 2011 to march 2012 a decline of 9.8% was reported in the TOT. From this time, a free fall has been there in the Australia n TOT a situation that economists argue is beginning to get serious. The data available for the period of June quarter on the Australian dollar and the prices of commodities suggests that the TOT decreased by another 7% bringing the total TOT decline in three consecutive quarters to approximately 16%. The TOT absolute level is still high on any particular long run assessment but the decline does not suggest that the country is at the low point of the cycle. The fall in the TOT presents a huge downside risk to the economy of Australia.3 The TOT and the TWER (trade weighted exchange rate), for the actual year 1998 to 2012 and also the indicative for the year 2012 to 2017 are displayed in the figure below. Sources: the exchange rate was retrieved from the Statistical Bulletin of the Reserve Bank of Australia while the TOT (terms of trade) was retrieved from the ABS Table 1 Cat. no. 5206.0 The Mundell-Fleming model is regarded as an open economy IS-LM version with inclusion of capital f lows as a vital constituent of the model. The model is developed for the assessment of macroeconomic policy in a little open economy regarded as a price taker in import and export markets. The economy of Australia is definitely a small and open economy thus the application of this model to analyse the macroeconomic policy. In the last decade the imports and exports of services and goods of Australia were averaged at 37.3% of the GDP. The ISLM – BP model requires the capital mobility in order for the capital flows role to be activated. From the year 1980s both the capital outflows and inflows have

Databases Essay Example | Topics and Well Written Essays - 1000 words - 2

Databases - Essay Example The construction of a relational database is built around the concepts of relations. This theory include relational algebra (which is a set of mathematical operators which operate on relations and produce relation results), relation variables, and relational comparison operators. A database suitability of a given kind of database, either object oriented or relational databases, depends on the requirements of the user. The anatomy of a relation consist of the body, which is the cardinality of the relation, attribute name and attribute values (Halpin & Morgan, 2010). The number of attributes is referred to as the degree of the relation, while the number of tuples is the cardinality. On the other hand, a set of attributes is the heading of the relation, and the set of tuples is the body of the relation. To manage a database and provide access to them, a database management system is used. Database management system is predominantly used in accepting commands provided by application prog rams and executing them on behalf of the user (Ritchie, 2002). This commands are written in database language of the database management system like SQL. Some of the responses include messages, results of queries, and completion of codes. Database management system normally operate as servers in order to support a wide variety of concurrent users. Application programs which run as clients for the set servers are its immediate users. These clients run on behalf of the end users. In transmission of this commands, communication protocol is required and also responses between servers and clients. When a client needs to submit information to the server, a connection must first be established between the client and the servers. This initiates a session. This session typically lasts until it’s terminated on an explicit request by the client. Relational databases have a wide range of application. Thus, this implies its importance in computing and data warehousing. Relational database s are important in disaster recovery planning. This is due to several reasons which are highlighted below; 1. Relational databases have an ease of maintenance. Once a backup plan is developed using its maintenance is of great importance. Systems developed with relational databases are easy to maintain. This is due to the fact that once a simple entry is edited, the whole database is updated (Ritchie, 2002). Also, data from other sources can be easily be incorporated into the existing database. This is simply by importing the data using the import function into the current database. This is instantaneous and the imported data is automatically updated into the database. This makes the database maintenance easy since new information is added with easy. 2. Relational databases have ease of access. This is the most important factor during planning, developing maintaining, testing and the actual process of recovery. The interrelationship that characterizes relational database systems make s the recovery availability online easy and instantaneous. In the case in which the database relationship has been established sensibly, important information can be reached from any terminal which has accessibility to the mainframe. This is if and only if the system is operational. Apart from assisting in disaster preparedness, relational database are needed since there use ensures that there are minimal; duplication of data in a given relational databa