4.1 - International Competitiveness

Question 1

What are the 6 factors that influence international competitiveness?

Answer 1

Comparative Advantage
Geographical location
Labour productivity
Labour unit costs
Geopolitical power
Exchange rate

Question 2

What is international competitiveness?

Answer 2

Degree to which nation can compete in international markets
Simultaneously maintaining + expanding real incomes of its citizens

Question 3

What is price competition?

Answer 3

How cheap nation can provide good/service

Question 4

What is non-price competition?

Answer 4

Product Quality
Design
Innovation

Question 5

How to measure competitiveness?

Answer 5

Relative export prices
Productivity

Question 6

What are relative export prices?

Answer 6

Ratio of export prices relative to another nation
Lower Rep, more competitive

Question 7

What influences the Rep index?

Answer 7

Exchange rates
Inflation
Higher, damages competitiveness

Question 8

How does productivity measure competitiveness?

Answer 8

Measure of output per input
Most common measure is labour

Question 9

What are unit labour costs?

Answer 9

Labour cost per unit output
Rise when productivity falls

Question 10

What are the 4 main factors that influence competitiveness?

Answer 10

Infrastructure
Govt. efficiency
Business efficiency
Economic performance