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Productivity Flashcards

naaar phillis

1
Q

Productivity

A

Productivity is the practice of producing more output for the same or less of an input

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2
Q

Stat about productivity in the last 30 years

A

Has doubled but has become stagnant in the last 10 years

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3
Q

Working hours and productivity

A

Not about working longer hours, rather it is about making the most of the resources we have available

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4
Q

When does productivity grow

A

When we can produce more outputs for the same or fewer inputs

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5
Q

Measured sense of growth of productivity

A

Represents growth in outputs over growth of inputs

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6
Q

Equation for productivity

A

Output volume/input volume

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7
Q

2 ways to demonstrate productivity

A

ad/as and APF

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8
Q

5 positives of productivity growth

A

Efficiency

Supports consumption

Economic goals

Environment

International Competitiveness

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9
Q

Efficiency benefit

A

Improvement in the efficiency of resource use over time

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10
Q

Economic goals

A

Impacts positively on all economic goals eg,fe,resource allocation etc

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11
Q

Environment

A

If output can increase for less imports then living standards can rise without eroding the quality of the environment

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12
Q

International competiveness

A

Means we can sell exports and compete against imports

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13
Q

Productivity and income growth

A

In the medium to long run, the growth of real income depends largely on productivity growth

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14
Q

eg of effect on income growth

A

pg had a period of strong growth in 1990’s thus high income growth

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15
Q

Why did incomes still grow when PG fell stagnant in 2000s

A

The effect of a decline in PG was offest by the boost in incomes from the rise in Terms of trade over the past decade

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16
Q

Single factor productivity

A

Is a ratio of output to inputs of labour when there is only one input in the denominator

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17
Q

2 ways to calculate sfp

A

GDP/Labour Hours and by capital deepening + MFP

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18
Q

Capital productivity

A

is the ratio of output to capital input

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19
Q

measuring Capital productivity

A

Output/ how long capital is used for

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20
Q

Multifactor productivity

A

measures the efficiency of which capital and labour are combined to create output

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21
Q

Calculating MFP

A

GDP/ labour hours + capital inputs

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22
Q

What does MFP represent

A

The part of growth in output that cant be explained by growth in labour or capital inputs

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23
Q

What changes does MFP reflect

A

Technological change and management ability

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24
Q

management ability

A

Their ability to

Combine labour and capital

Innovate

Introduce trainig

Motivate workers

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25
Capital deepening
Is defined as growth in the ratio of quantities capital to labor
26
Capital deepening formula
Capital Deepining= Labour productivity- multifactor productivity
27
2 Parts of productivity determinants
Productivity improvements and underlying factors in an economy
28
3 parts of Productivity improvements
Productivity of labour, capital and multifactor productivity
29
Productivity of labour
Refers to human capital i.e the health, education and skills of the workforce
30
3 things under productivity of capital
Tech advances Accumulation of Knowledge Specialization in production
31
Accumulation of knowledge
Are seen as central in the development and application of new technologies (i.e innovation)
32
4 things under multifactor
Firm improvements Production techniques Managing organisational change Adapting to change
33
Firm improvements
Improvements in firm organisation, management practices and work arrangements can be a major source of productivity
34
Production techniques
Bringing into operation better production techniques and the accumulation of physical capital
35
4 things under governments role
Promoting competition Openness of the economy to trade and investment Access to overseas Regulations
36
Access
To overseas tech and management expertise may not be possible without openness to foreign trade and investment
37
Regulations
Can inhibit the adoption of different production methods and new technologies
38
Productivity and economic growth
Surrounds the law of diminishing marginal returns as its difficult to maintain sustained EG simply by adding more resources, thus an increase in productivity is needed to maintain a sustained growth rate
39
3 changes in productivity over last 10 years
Improvments following the mining boom due to increased capital investment Mining boom dip due to decreased incentive to work changes in debt policy make Durable goods more affordable thus improving performance
40
Productivity and inflation
By shifting supply it can be seen that inflation decreases- becuase productivity decreases cost push inflation
41
Productivity and employment and redistribution
By achieving growth it means higher level of employment which also improves the redistribution of income
42
Allocation of Resources and productivity
Obviously assists in improving the efficient allocation by improving allocative efficiency
43
7 supply side policies
Tax reform Deregulation Labour market reform Trade liberalization research and innovation Education and training Investment in infrastructure
44
3 ways for labour market reform
Fairk Work act 09, work choices, national employment standards
45
What is labour market reform
Involves changes or modifications to the laws relating to the setting of wages and the negotiation of working conditions
46
Fair work act
Created enterprised based bargaining, good faith bargainign and ammendements for family friendly nature and assistance with unfair dismissal
47
What is good faith bargaining
Requires each party to make a sincere effort in negotiations
48
What is deregulation
Removal of unnecessary restrictions that impede the free market from operating effectively
49
1 ways for deregulation
Removal of monopilies
50
Removal of monoploies
progressive Privitisation of Telstra in the 90's dismantlted monopoly control over telecomms allowing for optus and vodofone etc to enter the market
51
effect of removal of monopolies
Intensifies competition because privatised companies are more driven to increase efficiency as they are forced to keep their profit margin
52
Tax reforms what is
Changes to tax rates and the removal of inefficient taxes
53
Tax reform affect on productivity
Lowering production costs of firms as well as using tax savings to improve quality of labour and capital
54
3 tax reform policies
Company tax rate cuts Asset write off Small Corporations
55
Company Tax
Company tax rate cut to 25% for small and medium soized companies with an annual turnover less tha 50 million
56
Asset write off
Instant asset write off thresholf to 30,000 heping to reinvest in business, employ more workers and grow.
57
Small corportations Tax
Jobs and small businesses package in the 105 budget saw a 1.5% cut in tax for small corporations
58
3 p's for Real Gdp Growth
Popultation Growth Participation rates growth Productivity growth
59
Trade liberalization what is it
Refers to trade agreements, tariff reductions and subsidy re movement
60
How does trade liberalization refer to productivity
- Removing subsidies forces domestic firms to improve productivity. - Cheaper intermediate/capital goods - Reducing COP
61
Effect of labour market reform
Greater incentive to work harder increasing productivity as employees know they will be able to achieve pay rises that they can negotaite with their employer not the government
62
What is competition policy
Is not just examining the laws that encourage competitive behaviour but also removing restrictions that may impede competition
63
What was the NCP
Aimed at increasing competition, lower prices and greater efficiency in the use of resources by firms
64
2 NCP measures
Strucutral reform of public sector monopolies to faciliatate competition A review of all legislation across AUS that restricted competition
65
Example of trade liberalization
The general tarrif rates on most goods and services were progressively reduced from around 36% to 5% by 1996
66
What is research and innovation
Implementation of a new/improved product process and marketing methods in business practices or external relations
67
Effect of innovation of productivity
Involves access to new products/industries and markets helping to drive productivity
68
Eg of innovation
National Innovation and Science Agenda will drive smart ideas for business growth and local jobs through 1.1 billion for 24 iniatives
69
What is infrastructure policy
Refers to policy around economic infrastructure like rail,road,ports and sewerage
70
2 benefits of infrastructure to productivity
Less travel time for goods and people Connectivity between regions
71
Eg of infrastructure policy
2007 Rudd gov committed 22 billion to AUS link to beat capacity constraints and bottlenecks in transport infrastructure

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