Assessment of a country as a market

Question 1

Factors to consider when assessing a country as a market:

Answer 1

• levels and growth of disposable income
• ease of doing business
• infrastructure
• political stability
• exchange rate

Question 2

Disposable income

Answer 2

Income that consumers have left to spend after tax

• gross domestic income per capital is a good proxy for the relative levels of disposable income in different international markets
• businesses looking to expand internationally may identify countries with fast growing income per capita as a key factor
• rising disposable incomes are often associated with the growth of “middle class” with money to spend on products and services

Question 3

Ease of doing business

Answer 3

Assessing a country as a market is to consider how easy (or difficult) it is to “do business” there 
- how accessible markets are 
E.g
- effectiveness of institutions 
- quality of infrastructure 
- health and primary education 
- innovation

Question 4

Choosing a production location- importance of labour productivity

Answer 4

For many businesses, particularly those with labour intensive operations, unit labour costs are important.
Labour productivity can be measured by GDP per hour worked and per worker and growth in GDP per hour worked

Question 5

How might a country to improve the competitiveness of its workforce?

Answer 5

• skills- workplace training to increase people’s occupational mobility and increase the flexibility of the labour market
• enterprise- programs for start ups
• ## mobility- housing market reforms to improve affordability and geographical mobility