International Competitiveness Factors

• Factor on international Competitiveness: productivity?

  low productivity = high cost of production

  • Decrease AS
  • Higher selling price
  • Weaken competitiveness
• Factor on international Competitiveness: production costs?

  High production costs

  • Decreases AS
  • High selling price
  • Weaken competitiveness
• Factor on international Competitiveness: available natural resources?

  AUS has a lot of resources

  • Cheaper to obtain as its abundant
  • Low cost of production
  • Low selling price
  • More competitive
• Factor on international Competitiveness: Exchange rate?

  AUD decreases

  • Cheap selling price so more competitive
  • increase cost of production so less competitive

  AUD increases

  • Expensive selling price so less competitive
  • Decrease cost of production (cheaper imports) so more competitive
• Factor on international Competitiveness: Relative inflation rates?

  • If increases then more expensive selling price so less competitive
  • if decreases then cheaper selling price so more competitive