Contemporary Factors - Aggregate Supply

Question 1

Quality and quantity of factors of production

Answer 1

Trend: Australian producers have struggled to get access to quality and quantity of factors of production. For example, we have labour shortages and skill shortages in the labour market in addition, supply chain disruption has caused shortages in other factors of production.

Question 2

Costs of production

Answer 2

Trend: rising
Reasons: labour shortages creating upward pressure on wages, shortages of building materials increasing cost of timber etc, high price of petrol, supply chain disruptions

Question 3

Productivity growth

Answer 3

Trend: flat (labour productivity) / slight improvement (overall productivity)

Question 4

Technological change

Answer 4

Trend: no major changes or developments in the Australian economy.

Question 5

Exchange Rates

Answer 5

Trend: has remained flat over the last two years, depreciating in 2021 and then appreciating in 2022

Question 6

Climatic conditions:

Answer 6

Floods have plagued the east coast of Australia