2013_AJC_H1_Econs_CaseStudy

Question (a) (i) (ii) n 1 Fuel pr Using Tab 2009 and 2 Oil consum Oil consum Explain wh balance in The curren goods, cur Indonesia’ s position till Perspecti v balance. Oil consu m been incr e domestic o needs to m that the nu account ba Perspecti v account b However, t The data f o at thousan consumed taking into comprehe n price of oil OR The data o other exp o explain the balance. [ 1 revenue of and net tra JC2 201 rices and th ble 1, comp 2012. mption gene mption was a hether the n Table 1. nt account b rently rende s current a a deficit po ve 1: The a mption con s easing ov e oil producti o meet this s h umber of im alance. [1m] ve 2: The a alance. there are lim or oil produc d barrels da . [1m] How e considerat nsive analys has to be c only conside orts and im e impact of 1m] As cu r f other good ansfers, the Anders 13 H1 Econ Case he need for pare Indone rally increas always grea above exp balance is t ered service account g e osition in 20 above expl sistently ex c er the yea r on has de c hortfall by i ports would ] above does mitations to ction and co aily. As such ever, curren ion net infl o sis of the c h considered. ered the oil ports in th e changes in rrent acco u ds and servi data on oil 1 son Junio nomics Pr Study Qu r renewable esia’s produ sed while oi ater than oil lains the ch he balance es, income f enerally wo 12. ains the c h ceeds dom e rs becaus e creased. T h mporting fr o d be rising [ s not expl a the data in T onsumption h the data o nt account b ow or net o hanges to t [1m] componen e current a n oil produc t unt also co ices and oth production or College relims Exa uestions e energy uction and il production production hanges in I of the tran flows and un rsened ov e hanges in estic oil pr o e oil cons u his sugges t om other c 1m] and thi ain the ch a Table 1. in Table 1 only reflects balance is m outflow of m the export r nt. Hence, h ccount bal a tion and c o nsists of i m her compon and consu aminations consumpt n generally throughout Indonesia’s sactions of nrequited tr er the yea Indonesia’ oduction a n umption h a ts that Ind o ountries. H s is likely to anges in I n is presente s quantities measured in money. Henc revenue or i how significa ance has t o onsumption mport expe nents such a mption is lim s tion of oil b decreased. the years. s current a currently p ransfers. rs from a s current a nd the sho r as increas e onesia incr e ence, we c o worsen its ndonesia’s ed in absolut of oil produ n monetary ce, to have import expe ant oil is r e o be consi d on current nditure an d as net incom mited to exp between [1m] [1m] ccount roduced surplus account rtfall has ed while easingly can infer s current current te terms ced and y values, a more enditure, elative to dered to account d export me flows plain the [2] [4]

2 changes to current account balance. [1m] (b) (i)