Easy eco questions for high achievers (1 Viewer)

[mashi]

1. Explain the effect of an increase in productivity on unemployment.

2. Compare and contrast the concept of structural change and microeconomic reform.


Now, don't refer to your textbooks! =)

 

[absolution*]

1.
(+) Productivity --->
(+) Supply --->
(-) Demand --->
(+) Unemployment.

2.
Microeconomic reform ---> structural change

WHAT DO I WIN?!?!!!!111!ONE!!!11!ELEVEN!11!!1!!
ROFLOLLERSKATES

 

[miffytoki]

1. Explain the effect of an increase in productivity on unemployment.

a rise in an economy's productive capacity (and hence economic growth and aggregate demand) will lead to lower rates on unemployment, as firms will need to hire more workers to satisfy the growing demand in the economy.

2. Compare and contrast the concept of structural change and microeconomic reform.

Structural change refers to changes made to an economy's productive capacity or level of technology and often ocurs as a result of Microeconomic Reform. Microeconomic Reform often involves structural change and takes a long period of time to take effect. An example of Microeconomic reform is increased competition as a result of the introduction of NCP.

 

[Silver Persian]

I thought if productivity rose but aggregate demand remained constant, unemployment would rise, as less labour can now satisfy consumer demand

 

[i-color]

Yeah that's okun's law....which states that for unemployment to actually decrease, eco growth must grow faster than productivity growth

 

[aditya]

is it just me or is toki here wrong?

and i think the answer for the second one would be:
structural change refers to changes in teh way the eocnomy and the firms within it function, i mean, for e.g. deregulating financial markets is an exmaple of structural change, privatisation of firms is structural change (is it?) wage determiniation systems such as the award or the AWA changes in those are all exampels of structural change... microeconic reform can be a result of structural change - meaning, as a result of structural change, the government will need to apply microeconomic policies to "clean up" the leftovers so to speak, generally involces re-training of labour, or professional help on the new structural change - like when the GST came in, they offered free advice for small businesses....

 

[jimmik]

I thought if productivity rose but aggregate demand remained constant, unemployment would rise, as less labour can now satisfy consumer demand

can u please verify this in a more simpler explanation please? is this wat u mean:

if u increase productivity ---> increase ouput using same amount of input ---> less labour needed to meet the same aggregate demand ---> unemployment rises

 

[rumour]

1. Explain the effect of an increase in productivity on unemployment.

2. Compare and contrast the concept of structural change and microeconomic reform.


Now, don't refer to your textbooks! =)

But isn't MER structural change?

 

[rumour]

and i think the answer for the second one would be:
structural change refers to changes in teh way the eocnomy and the firms within it function, i mean, for e.g. deregulating financial markets is an exmaple of structural change, privatisation of firms is structural change (is it?) wage determiniation systems such as the award or the AWA changes in those are all exampels of structural change... microeconic reform can be a result of structural change - meaning, as a result of structural change, the government will need to apply microeconomic policies to "clean up" the leftovers so to speak, generally involces re-training of labour, or professional help on the new structural change - like when the GST came in, they offered free advice for small businesses....

All the things that you have stated are areas of MER & re-training of labour isn't part of MER!!! But the GST is!!!!

 

[Teoh]

Structural change is the process where the production and methods of production change within an economy, over time, due to changes in demand and technology.

Microeconomic reform is government action to reallocate the amount of resources in an economy, from inefficient firms, to efficient ones.

 

[Silver Persian]

can u please verify this in a more simpler explanation please? is this wat u mean:

if u increase productivity ---> increase ouput using same amount of input ---> less labour needed to meet the same aggregate demand ---> unemployment rises

Yes :uhhuh:

 

[jimmik]

ahaha. thank u! i kno sumthing hehe *dances*