econ final

Conditions of a perfectly free and competitive market

1. free from gov intervention

2. homogenous goods

3. perfect info

4. large number of buyers and sellers

5. no barriers to entry

6. resources are mobile

Demand NPF

1. disposable income

2. consumer confidence

3. interest rates

4. price of substitutes

5. price of complements

6. preferences and tastes

7. population demographic

Supply NPF

1. cost of production

2. productivity growth

3. technological change

4. climatic conditions and other disruptions

5. number of suppliers

Factors affecting PED

1. degree of necessity

2. decision time

3. proportion of income

4. availability of substitutes

Factors of PES

1. production period

2. spare capacity

3. durability

AD factors

1. disposable income

2. interest rates

3. exchange rates

4. rates of ec gr overseas

5. consumer confidence

6. bus confidence

AS factors

1. quantity of fop

2. quality of fop

3. exchange rates

4. disruptions to int supply chains

5. gov regulations

6. productivity growth

7. tech change

8. cost of production

9. climatic conditions

Structural influences on CAB

1. savings-investment imbalance

2. higher costs of production

Cyclical influences on CAB

1. expansionary phase

2. contractionary phase

Causes of Aus NFD position

1. lack of domestic savings

2. successive budget deficits

3. opportunities for foreign investors

4. stable ec, political and social climate

5. lower value of AUD

6. financial sector deregulation and globalisation

Factors affecting the exchange rate

1. relative interest rates and capital flows

2. foreign investment

3. terms of trade and commodity prices

4. currency speculation and credit rating

5. relative rates of inflation

6. demand and supply of exports and imports

Factors affecting TOT

1. commodity prices

2. production cost in trading partners

Factors affecting international competitiveness

1. productivity

2. cost of production

3. availability of natural resources

4. exchange rates

5. relative rates of inflation

Strengths of MP

1. short implementation lag

2. powerful influence on expectations

3. powerful at restraining AD to control inflation during a boom

4. relatively free of political bias

Weaknesses of MP

1. long impact lag

2. cant address supply side issues

3. less effective in an ec downturn

4. blunt instrument

5. no direct control over interest rates

6. goal conflicts

Strengths of BP

1. relatively short impact lag

2. flexible (able to address AD and supply side issues)

3. not blunt (more targeted)

4. more effective during an ec downturn

5. closely scrutinised

Weaknesses of BP

1. long implementation lag

2. deficits increase public debt

3. political and social constraints

Supply side conditions

1. quantity of fop

2. quality of fop

3. productivity

4. int competitiveness

Three P’s that skilled migration impact

1. population

2. participation

3. productivity