Long-term policies to cure balance of payment deficits, Managerial Economics

Long-Term Policies

One long term option of tackling balance of payments deficit is export promotion.  In the long run this is the best method of improving a balance of payments.  If the general level of efficiency in an economy can be raised, then exports will benefit.  Efficiency can be promoted by mergers in exporting firms (thereby reaping economies of scale), research and economic growth - for it is felt that once an economy is growing it is generating the necessary dynamism and technological improvement that will feed through into a better export performance.

A second long-term option is Import Substitution.  The replacement of imports by home products can be achieved by economic planning.  If the defects of home products can be analysed, and the likely future trends in demand can be forecast, then domestic firms can take the necessary action both to improve their product and to expand their capacity.  Government support for certain industries can also be helpful here.

Posted Date: 11/30/2012 5:24:22 AM | Location : United States







Related Discussions:- Long-term policies to cure balance of payment deficits, Assignment Help, Ask Question on Long-term policies to cure balance of payment deficits, Get Answer, Expert's Help, Long-term policies to cure balance of payment deficits Discussions

Write discussion on Long-term policies to cure balance of payment deficits
Your posts are moderated
Related Questions
Define scarcity and opportunity cost. Show how these concepts are useful in managerial decision making

Gross Domestic Product A measure of national economic activity, GDP is measured from two approaches. GDP can be viewed as the total value of all goods and services produced in

is Indian companies running a risk by not giving attention to cost cutting?

Write about International economic integration of the Republic of Moldova

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2.

Income and Substitution Effects of Price Change When the price of a commodity falls the consumer's equilibrium changes.  The consumer can purchase the same quantity of X and Y

Menu Costs   Why do firms not change their prices very  frequently? Obviously, the costs of changing prices at  frequent intervals and in small amounts must be more  than the b

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

Discuss the importance of dividend decisions

Determine the Income Effect of law of demand As a result of fall in the price of a commodity, real income of its consumer increase at least in terms of this commodity. Or we c