Wednesday, February 26, 2020

Macro Economics - summary A Better Way Essay Example | Topics and Well Written Essays - 1000 words

Macro Economics - summary A Better Way - Essay Example Another beneficial factor for the increase in productivity is reorganization of labour force that has led to â€Å"fulfilling wants that had been unmet or may be even unknown.† (Page 5). Reorganization from trade also helps in creating more efficient deployment of labour economy wide as resources are shifted to their best uses as the producers seek comparative advantage in market place (following Ricardian comparative advantage). Higher productivity also helps in increasing the state of employment in the economy because higher productivity promises higher profits implying higher income for people. Higher income means higher demand and so there will be increase in investment and more creation of jobs. Furthermore, higher productivity provides the worker with more leisure and there by an opportunity to enjoy whatever they earn. This march to livelihood was not achieved in one day. After achieving self sufficiency in food grain with the advent of electrical appliances for cultiva tion, agriculture became capital intensive and freed up labor made their plunge to the industrial sector, thereby preparing a base for the tertiary sector to flourish. But the trend in productivity has been choppy. This has been â€Å"due to business cycle upturns and slowdowns as well as longer-term economic trends.†(Page 8). To make the increase in productivity continuing it is important that improvement in technology continues. With more improvement in technology there will be much more improvement in productivity. Technological improvement would bring in more sophisticated technologies which would help in improving the quality of work, save time and thus help in bringing down the costs. Again trade also makes a powerful impact on the overall efficiency of the economy. Productivity gains from trade stands for the operation of open markets. Due to expansion in trade it has now become possible to produce goods in those

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