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

Assignment Help:

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.


Related Discussions:- Long-term policies to cure balance of payment deficits

Real rigidities, Real Rigidities The New Keynesian economists  rely bo...

Real Rigidities The New Keynesian economists  rely both on nominal and real rigidities to  arrive at their conclusion that nominal changes in money  supply have real, and not

Show normal profit equilibrium, Q. Show Normal profit equilibrium? Nor...

Q. Show Normal profit equilibrium? Normal Profits: With the condition of  MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM

What is risk and production analysis, What is Risk and Production analysis ...

What is Risk and Production analysis Risk analysis:  Various models are used to quantify risk and asymmetric information and to employ them in decision rules to manage risk.

#, Illustrate the application of economic theory to some business problems

Illustrate the application of economic theory to some business problems

Explain supernormal equilibrium, Q. Explain Supernormal Equilibrium? S...

Q. Explain Supernormal Equilibrium? Supernormal Equilibrium: E is the point of stable equilibrium as MC = MR and MC cuts the MR from below.   Figure: Supernormal Equ

Compettitive market, Tomato Farm is selling tomatoes in a purely competitiv...

Tomato Farm is selling tomatoes in a purely competitive market. Its output is 5000 bushels, which sell for $15 a bushel. At this level of output, the marginal cost is $15 bushel an

At what price will demand for product be unitary elastic, Suppose you have ...

Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B

Where does the firm operate, Where does the firm Operate? The firm wil...

Where does the firm Operate? The firm will avoid stages I, II and III and will instead choose stage II.  It will avoid stage I because this shall involve using the fixed facto

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd