Microeconomic Reform

Definitions
1. capital widening ^labour force > ^capital equipment
2. capital deepening ^capital:labour ratio
3. disembodied change intangible e.g. management + education
4. embodied change tech e.g. NBN
MER: gov actions which \/ / remove barriers to efficient resource allocation to enable gov to achieve macro objectives
Structural Change - ongoing process of C + distribution patterns in economy, occurs naturally over time
1. e.g. tech change + growth of east asian markets like CHINA
2. MER ^rate + effectiveness of structural change. Aus is open trade economy - must meet tests of i/n markets, offering \/price, ^quality goods to dev export+import competing industries
Producivity - relationship b/w inputs needed to produce amt of output/time
1. labour (output/labour input)/time
2. capital (output/capital input)/time
3. multifactor (output/multifactor input)/time
Efficiency
1. technical - producing output w minimum average cost
2. allocative - firms charging prices to reflect marginal cost of prodn > resources allocated to reflect customer preferences
3. dynamic - ^adaptability to changing econ conditions using latest cost\/ tech to meet consumer preferences
Overseas Market
1. trade liberisation - \/tariffs + subsidies
2. FTA e.g. China, SKorea
3. freedom i'n m'ment capital e.g.FI
4. manufacturing idea > comparative adv
Imact on economy
1. PRICE STABILITY - \/avg costs of prodn+comp markets > \/prices
2. FULL EMPLOYMENT - ^growth rates>^labour demand+\/cyclical unemployment
  1. HOWEVER reform>structural unemployment>re-training required to avoid long term unemployment
3. ECON GROWTH (inflation less) bc ^productive capacity
4. EQUITABLE Y DISTRIBUTION - welfare>work _ ^econ growth>^gov fin ability to provide support to low Y earners
5. EXTERNAL STABILITY - consistent \/inflation rate>^i'n comp + ^capacity > ^X volumes

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	Criado por Nikaylasia aproximadamente 9 anos atrás