Flashcards
International Competitiveness
Cards in this deck (18)
- 1What does the demand for goods depend on?Te price of domestic goods, as well as the price of other goods. It also relies on consumer incomes and preferences.
- 2What does the demand for UK exports depend on?The price of UK goods, relative to prices of other countries' goods. Also, the income levels from around the world and international preferences on British goods.
- 3What do the UK's international transactions depend on?The exchange rate of the pound sterling, relative to other countries exchange rates. Also the purchasing power of UK incomes in the rest of the world
- 4What does demand for imports into the UK depend on?The price of domestic and foreign goods, relative to income levels in the UK. The preference for foreign and domestic produced goods also effect the demand, along with exchange rates.
- 5Exchange RatesPlays a key role in influencing the levels of imports and exports.
EX: A fall in the Dollar ($2.50 in 1971 - $1.50 in 2007) will improve the UK's product competitiveness. - 6Real exchange rate (RXR)Takes inflation into account
(EX: If the pound falls 3% against the euro, but the UK inflation was higher than 3% than the Eurozone, RXR would be unaltered. - 7Terms of TradeThe ratio of export prices to import prices. It provides information about the purchasing power of exports in terms on imports.
- 8What does a fall in trade indicate?Same volume of exports will purchase a smaller volume of imports compared to before.
This is unfavorable for any international economy. - 9Trade Welfare Index (TWI)Measures the value of the pound against a basket of currencies which are weighted according to their importance in UK trade.
- 10Effective Exchange Rate (EER)How much trade a country does with the other countries. It also considers the extent to which the country competes with these other countries internationally.
- 11CompetitivenessIs the ability of a nation to compete successfully internationally and sustain improvements in real output and wealth.
- 12The Global Competitiveness IndexYearly report published by the World Economic Forums (WEF). Made of 148 economies, Switzerland sit on top. It depends on how productively a country uses its available resources.
- 13Balance of Payments (As a measure of International Competitiveness)If the Current Account improves, exports have increased faster than imports. suggesting an improvement in competitiveness.
(UK doesn't fulfill this) - 14Relative Unit CostsMeasurement of labour cost in one country relative to those in another.
- 15Relative Productivity MeasuresOutput per worker per hour
- 16Factors that effect international competitiveness.Exchange Rates
Wage Cost
Non-Wage Costs
Labour Productivity
Education and Training - 17How does Education and Training effect international competitiveness?Human capital is effected if education is bad, as the workforce will be badly trained and will not be productive. Infrastructure will be poor as the finished product is of poor quality. More people will work flexible hours (Ex: Zero Hour contract)
- 18If the British industry was to become uncompetitive...Lower economic growth
Increased unemployment
Deterioration on the balance of payments
Devaluation of exchange rate
Higher levels of inflation
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- A-Level Economics Flashcards on International Competitiveness , created by Frankie Thatcher on 30/03/2015.
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- Frankie Thatcher
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