Micro and Macro Reasons

Question 1

What are micro reasons for protectionism?

Answer 1

Protecting Workers
Protect Against Dumping
Protect Standards

Question 2

What are macro reasons for protectionism?

Answer 2

Infant Industries and Diversification
Protect Against Unemployment
Tariff Revenue for Government
Solve Trade Deficit

Question 3

What are micro causes for a current account deficit?

Answer 3

Low Productivity
High Relative Minimum Wages
Strong Trade Unions
Resource Depletion

Question 4

What are macro causes for a current account deficit?

Answer 4

High Growth at Home
Low Growth Abroad
Strong Exchange Rate
High Relative Inflation
Poor Investment
Loss of Competitive Advantage - De-Industrialisation

Question 5

What are micro barriers to development?

Answer 5

Low Productivity
Poor Ed, Health and Infrastructure
Volatile Commodity Prices
Resource Depletion
Power of MNCs

Question 6

What are macro barriers to development?

Answer 6

Protectionism Abroad
Volatile Exchange Rate
Corrupt Government
Low Savings and Investment
Unbalanced Growth

Question 7

What are micro influences on international competitiveness?

Answer 7

Productivity -> ULCs
Regulations
Labour Market Flexibility
Competition
Subsidies
Investment, R&D, Banking Sector

Question 8

What are macro influences on international competitiveness?

Answer 8

Tax Rates
Relative Inflation
Exchange Rate
Infrastructure
Gov. finances
Protectionism

Question 9

What are micro effects of market structures?

Answer 9

Allocative Efficiency
Productive Efficiency
X-Efficiency
Anti-Competitive Strategies
Price Discrimination

Question 10

What are macro effects of market structures?

Answer 10

Dynamic Efficiency + LRAS
Jobs
Productive Efficiency + LRAS
Competitive Markets and Poverty Alleviation

Question 11

What are micro effects of a trade union?

Answer 11

Wages and Employment
Worker Rights and Protection
Monopsony Labour Market Outcomes
Costs to firms
Wage discrimination

Question 12

What are macro effects of a trade union?

Answer 12

Unemployment
Inflation
International Competitiveness, Trade and Current Account
FDI

Question 13

What are micro effects of a subsidy?

Answer 13

Price and Consumer Surplus
Quantity and Market Failure
Affordability and Equity
Producer Revenue and Inefficiency
Cost to Government

Question 14

What are macro effects of a subsidy?

Answer 14

Protect Domestic Producers and Workers
Inflation
International Competitiveness, Trade and Current Account
Govt Finances
FDI

Question 15

What are micro effects on privatisation/deregulation?

Answer 15

Allocative Efficiency
Productive Efficiency
X-Efficiency
Dynamic Efficiency
Stakeholder Impacts
Market Failures

Question 16

What are macro effects on privatisation/deregulation?

Answer 16

Productive & Dynamic Efficiency -> LRAS
Employment/Unemployment
Infrastructure Building -> Competitiveness & FDI
Government Revenue

Question 17

What are micro causes of income inequality?

Answer 17

Education
Age
Capital Intensive Production
Technology
Flexible Labour Contracts
Inheritance

Question 18

What are macro causes of income inequality?

Answer 18

One Sector Dominance
Recession
Globalisation
Gov. Policies/Corrupt Gov.

Question 19

What are the micro consequences of income inequality?

Answer 19

Social Costs
Incentive to be Educated
Incentive for Entrepreneurship
Incentive to Work

Question 20

What are macro consequences of income inequality?

Answer 20

Gov. Finances
Living Standards
Asset Bubbles & Indebtedness -> Financial Sector Instability
Growth

Question 21

What are micro policies to reduce income inequality?

Answer 21

Minimum Wage
Maximum Wage

Question 22

What are macro policies to reduce inequality?

Answer 22

Progressive Income Tax
G on Welfare (Transfer Payments)
G on Education/Health
Universal Basic Income (UBI)