lecture 4 Flashcards
what are some serious questions raised by the PP framework?
what are the technically efficient methods for producing each output?
i.e. which input combinations?
which technologies?
what are the economically efficient quantities of each output?
how many resources do we devote to shifting the PPF outward?
a question beyond the production frontier…
how do we distribute the stuff we make to consumers?
forces for change in NZs system in the 1980s ..
the suffering during the great economic depression of the 1930s and success of government war planning in the 1940s
what did this encourage the government to do?
this encouraged the government to intervene in the economy also known as: state planning
sales of ag products mainly to the UK helped support the system ….
but the UK joined the European economic community in 1973 just as oil prices sky rocketed.
both of which reduced UK demand for imports from NZ,
this lead to living standards in NZ to fall relative to the other countries which generated political support for change
what did the fourth labour government do in the 1980s?
after winning snap election, the labour government aimed to reduce rather than to increase the role of the state
1.who led the government in 1980s?
2.who was the real driving force of the reforms?
1.David lange
- the finance minister Roger Douglas whos name became synonymous with the controversial changes: Rogernomics
what was douglas’s agenda with regards to NZs economic woes?
to tackle high inflammation, big budget deficit, overseas dept and an overvalued currency,
this meant de - regulation, an end to tariffs, subsidies, and tax breaks as well as the privatisation and sale of state assets.
this is also when GST was introduced, the biggest tax reform since PAYE was introduced in 1957
deregulation of the economy and of international trade began in what year?
these major changes shocked NZ economic system and growth in GDP fell and conditions encouraged a decrease in domestic production of goods relative to services
