Scribd
Upload
87 views2 pages

POPSICLE DiGESTIF

The document outlines the micro and macro impacts of reduced protectionism on the economy. Micro impacts include changes in price, output, profit, market structure, inefficiency, competition, labor demand, and externalities, while macro impacts focus on development, inflation, growth, employment, trade balance, inequality, and fiscal balance. Overall, reduced protectionism can lead to increased competition and efficiency but may also exacerbate inequality and affect government revenue.

Uploaded by

a4ry4n2006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
87 views2 pages

POPSICLE DiGESTIF

The document outlines the micro and macro impacts of reduced protectionism on the economy. Micro impacts include changes in price, output, profit, market structure, inefficiency, competition, labor demand, and externalities, while macro impacts focus on development, inflation, growth, employment, trade balance, inequality, and fiscal balance. Overall, reduced protectionism can lead to increased competition and efficiency but may also exacerbate inequality and affect government revenue.

Uploaded by

a4ry4n2006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Popsicle is micro impacts in paper 3:

P – Price
O – Output
P – Profit
S – Structure of the market
I – Inefficiency
C – Competition
L – Labour market
E – Externalities

Digestif is macro impacts in paper 3:

D - Development
I – Inflation
G – Growth
E – Employment
S – Structure of the economy
T – Trade balance
I – Inequality
F – Fiscal balance

Impacts on the global economy of reduced protectionism:


 Micro
o Price of goods may fall because of lack of tariffs, and increased pressure to be
competitive.
o Output increases as more firms can produce.
o Profits can decrease for dominant firms as other firms can compete in the
market (fall in supernormal profit), profit may increase for foreign firms that
couldn’t previously export.
o Structure of the market becomes more contestable as the barriers to entry
and exit decrease making firms behave in a more competitive manner.
o Inefficiency is decreased in the market because firms no longer have a safety
net of a tariff that prevents foreign producers from being priced out of the
market.
o Competition is encouraged and increased because the most efficient firms
now have the advantage in the market as protectionism no longer creates a
level playing field for less efficient firms meaning that firms have to improve
their effectivity.
o Labour market demand increases as firms need people to fill spaces that
would catalyse an increase in output to the widening base of consumers,
could also decrease for domestic firms that are inefficient.
o Externalities domestically can decrease if production is moved to foreign
countries, it will usually increase though because of higher supply from other
countries and transport emissions such as bringing goods over from china.
 Macro
o Development may increase in LEDCs because they can sell exports more
easily to areas such as the EU.
o Inflation may increase if M are greater than X, lower COP on the other hand
can decrease inflation such as raw materials like oil being cheaper.
o Growth will increase as exports are greater than imports.
o Employment increases for firms now able to produce and export (increased
output); may decrease for domestic firms if they can no longer compete.
o Structure of the economy: X is a component of GDP, so economic growth.
o Trade balance improves in developing countries export more (i.e. Deficit will
decrease); particularly true for countries with comparative advantage.
o Inequality: may worsen: it depends where the production occurs (e.g. is there
a minimum wage? How low is it? Lack of labour mobility).
o Fiscal balance is decreased as the government receives less tax revenue as
the tariffs are reduced. However, if a quota or ban occurs then the
government revenue is not affected.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy