GCSE Economics Unit 12 - Chapter 3

GCSE Economics Unit 12 - Chapter 3

1. Understanding International Trade

   • Imports
     • The goods and Services the UK buys from other countries
       • Volkswagen Cars
   • Exports
     • The goods and services that the UK sells to buyers in foreign countries
       • Jaguar Cars
   • Balance Of Payments
     • the difference between the value of all exports and imports
     • UK tends to import more goods than export (opposite with services)
   • Globablisation
     • Advantages
       • More Jobs
         • Because Exports increase production and therefore more jobs available.
       • Higher Economic Growth
         • Because exports earn money and higher productivity increases economic growth.
       • More Choice
         • UK customers can choose from goods that are otherwise not available in the UK.
       • Cheaper Prices
         • Many of the goods are imported from places such as India or China. These countries have a lower minimum wage therefore cheaper labour. This means the good is produced for cheaper and can be sold for cheaper.
       • Increased Competition
         • All companies have to work harder to attract consumers. Therefore they try to lower their prices and develop more attractive and better goods.
       • Raw Materials
         • The Uk Is quite poor in raw materials therefore the UK can get this via imports. Such as metals, gems and energy.
     • Disadvantages
       • Increased Competition
         • Though it can benefit consumers with cheaper prices. UK firms may find it difficult to compete because ewe have higher labour costs than some countries. People could be out of work in the UK.
       • Economic Dependancy
         • For Example, the Uk imports a vast amount of food, a disruption to this might threaten our survival.
       • Power of MNCs
         • Multinational Corporations (MNCs) are becoming very powerful. All governments are finding it harder to control MNCs.
   • Environmental Impact
     • Increases CO2 emissions
       • Because of Transport

2. Exchange Rates

   • Effect on Exports
     • Many goods and services that the UK exports cost less in euros.
       • Will make them more attractive to European buyers.
       • Travel to the UK will be cheaper, meaning increased tourism.
         • Which will help to increase UK exports, jobs, income and growth.
   • Effects on Imports
     • The weak sterling causes imports to be more expensive
       • This effects the consumers and the businesses.
       • Farmers happy because imported foods become more expensive so some turn to UK farmers.
         • This is the same with most goods and services.