international competitiveness Flashcards
1
Q
3 measures of international competitivemess
A
- unit labout costs
- relative export prices
- global competitiveness index
2
Q
how does the global competitiveness index measure competitiveness
A
Looks at infrastucture health education and tech as they affect prices and quality of goods
3
Q
What does a higher global competitiveness index number mean
A
more competitive
4
Q
factors affecting global competitiveness
A
- exchange rates
- wage costs
- non wage costs
- supply side polocies
5
Q
Why does an increase in wage costs decrease competitivenss
A
- higher production costs
- SRAS shifts left
- increase in price level
- decreasing competitiveness
6
Q
Example of non-wage costs influencing competitiveness (3)
A
- employers contributing towards pension schemes
- health and safety regulations
- corporation tax
7
Q
example of supply-side policy for competitiveness with evaluation (5)
A
- eg lowering corp tax
- increases SRAS lowering price
- BUT have cut in healthcare
- decreasing productivity
- shifting LRAS to left increasing price
8
Q
benefits of improving international competition(3)
A
increased jobs
means exports cheaper so higher demand increasing AD
No trade defecit
9
Q
problems of improving international competitiveness(4)
A
- lead to cost push or demand pull inflation
- more demand for the currency than supply leading to appreciation
- excessive protectionism leading to retaliation
- lot of their production for over seas, wb production for domestic consumers? not enough consumer spending
