ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Relative prices of exports fall in world markets
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Relative prices of exports increase in world markets
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Supply side policies are ineffective
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The value of the £increases
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Detailed explanation-1: -The more productive a country becomes, the lower its unit labour costs. This makes the country more internationally competitive. This is the ratio of one country’s export prices relative to another country, and it is expressed as an index. The lower the relative export price, the more competitive the country.
Detailed explanation-2: -The UK is a particularly successful exporter of services – with a strong comparative advantage in a range of sectors, including financial services, business and professional services, IT and communications, design and media, and travel and tourism.
Detailed explanation-3: -Exports play an important role in the UK economy, influencing the level of economic growth, employment and the balance of payments. In the post-war period, lower transport costs, globalisation, economies of scale and reduced tariff barriers have all helped exports become a bigger share of national income.
Detailed explanation-4: -Competitiveness Rank in the United Kingdom averaged 9.08 from 2007 until 2019, reaching an all time high of 13 in 2010 and a record low of 2 in 2007.