ECONOMICS (CBSE/UGC NET)

ECONOMICS

BALANCE OF PAYMENTS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following structural factors would reduce a trade deficit?
A
An appreciation of the exchange rate
B
An increase in multifactor productivity growth
C
Additional regualtion of the business sector
D
An increase in the company tax rate.
Explanation: 

Detailed explanation-1: -For any given industry, the combined inputs include labor, capital, energy, materials, and purchased services. MFP tells us how much more output can be produced without increasing any of these inputs. The more efficiently an industry uses its combination of inputs to create output, the faster MFP will grow.

Detailed explanation-2: -Multifactor productivity examines growth in labour productivity through its key determinants: capital intensity (or changes in the amount of capital per hour worked), investment in human capital, technological change, organizational innovation and economies of scale.

Detailed explanation-3: -Labor productivity is largely driven by investment in capital, technological progress, and human capital development. Business and government can increase labor productivity of workers by direct investing in or creating incentives for increases in technology and human or physical capital.

Detailed explanation-4: -There are many factors that impact a country’s productivity. Such things include investment in plant and equipment, innovation, improvements in supply chain logistics, education, enterprise, and competition.

There is 1 question to complete.