Ch. 78 International Competitiveness

Question 1

Measures of IC? (4)

Answer 1

3RC

• relative unit labour costs
• relative productivity measures
• relative export costs
• composite indices

Question 2

Factors affecting IC? (3)

Answer 2

ROW

• real exchange rate
• other factors (labour productivity, infrastructure, R+D, labour market flexibility)
• wage and non wage costs

Question 3

Example of non wage costs? (4)

Answer 3

Environmental regulation
Pension schemes
H+S regulating
NI (employment tax)

HIGHER IN MORE DEVELOPED COUNTRIES THEREFORE REDUCING INTERNATIONAL COMPETITIVENESS

Question 4

Policy to increase competitiveness? (6)

Answer 4

GRIMPO

• government expenditure (infrastructure)
• reform public sector (less red tape)
• investment incentives (tax breaks)
• macroeconomic stability ( low inflation, stable exchange rate, steady growth)
• privatisation
• occupational mobility increasing measures (education and training schemes)

Question 5

12 pillars of competitiveness for Global Competitiveness Index?

Answer 5

BIG FIT HHIMML

Business sophistication
Institutions
Goods market efficiency
Financial market sophistication
Infrastructure
Technological readiness
Health and primary education
Higher education and training
Innovation
Macroeconomic stability
Market size
Labour market efficiency

Question 6

Define international competitiveness?

Answer 6

A country’s ability to sell its goods and services in domestic and international markets at a price and quality that is attractive in those markets.

Question 7

Non price factors of IC?

Answer 7

DARQ

• design
• availability
• reliability
• quality