International competitiveness
- Created by: courtroberts
- Created on: 15-03-17 21:38
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- international competitiveness
- Terms of Trade
- a measure of a countries export prices in relation to a countries import prices
- improving
- export prices rise faster than import prices
- ^ living standards
- worsening
- export prices rise slower than import prices
- Prebisch - Singer hypothesis
- primary product dependant countries
- manufactured goods are more elastic in terms of demand
- commodities prices rise slower than manufactured goods prices
- probelms for developing economies
- decrease buying power of exports = difficult to buy imports
- fall in living standards
- hard to service foreign debt
- worsens foreign exchange gap
- factors influencing competitiveness
- exchange rates
- quality
- tax
- inflation
- cots of raw materials
- Relative unit labour costs
- decrease labour costs
- ^ output per worker
- costs include:
- wages
- recruitment
- training
- pensions
- equpiment
- decrease labour costs
- relative export prices
- fall in RXP
- our export prices rise at a slower rate than competitors exports
- fall in RXP
- Terms of Trade
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