Presentation on theme: "National & Global Economy"— Presentation transcript:
1 National & Global Economy GCSE ECONOMICS: UNIT 11National & Global EconomyUnderstanding International Trade
2 Aims of today’s lesson … Identify the main types of exports from, and imports to, the UK economyAnalyse the importance of trade to the UK economyCandidates should appreciate the advantages and disadvantages from Global Trade
3 Keywords Search….Using Google find keyword definitions of the following;Imports (M)Exports (X)Balance of payments (BOP)International TradeGlobalisationBOP DeficitBOP SurplusComplete this using the task sheet called ‘3.1 Understanding international trade’ in the SSAImports: Imports (M) are the goods and services the UK buys from other countriesExports: Exports (X) are goods and services that the UK sells to buyers in foreign countries e.g. Jaguar carsBalance of payments: a record of the value of a country’s exports, imports and financial transactions with the rest of the world over a yearInternational Trade: International trade is the exchange of capital, goods, and services across international borders or territoriesGlobalisation: Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happenBOP Deficit: The value of imports is greater than the value of exportsBOP Surplus: The value of exports is greater than the value of imports
4 International TradeEach year the UK trades a high value of goods and services with other countriesExports (X) are goods and services that the UK sells to buyers in foreign countries e.g. Jaguar carsImports (M) are the goods and services the UK buys from other countriesQ. What items do we regularly buy which may be imported from foreign countries?A. Clothing; electrical; fruit and vegetables
5 What are goods & services? Goods are things like televisions or cameras, which can be physically handledGoods are often referred to as visiblesServices are things like tourism, financial services or insurance, which cannot be physically handled or seen, often called invisibles
6 Is International Trade important for the UK? By the end of 2010 UK international trade accounted for 3.4% of World TradeForecasters predict that UK trade with the rest of the world will grow substantially over the next 15 yearsIt is anticipated that merchandise trade volumes in 2025 will be $1,360.7billion increasing from their levels at the end of 2010 of $933.7billionOn these figures alone you can see how much international trade is worth to the UK EconomyA huge number of businesses rely heavily on selling their products and services to international customers, providing a large number of jobs to UK citizens
7 3.1 Understanding International Trade Over to you…Open and complete the task below…3.1 Understanding International Trade
8 Balance of PaymentsCalculate the BOP for the selected goods, services in the table below…What is the overall BOP?Answers:Goods: -£100,791 billionServices: £13,239 billionOverall: -87,552
9 Balance of PaymentsWhen we include other goods and services the imbalance (in this case, the deficit) isn’t as severe…
10 Plenary: Trading around the world Before you start, think about what you want to accomplish as a trader:Do you want to build up as much wealth as you can by selling as much of your commodities as you can?Do you want to buy the widest range of goods to satisfy diverse consumer tastes at home?Or do you want to focus on buying the raw materials for a particular industry?The only limit is your imagination, your negotiating skills, and your bank account!
11 The importance of trade to the UK Economy As we have seen international trade is very important to the UK economyEach and every country in the world has a different set of raw materials, climates, cultures, labour skills etc giving them an advantage in producing certain goods and servicesThis is known as Comparative AdvantageThrough trade the UK can specialise in produce those goods and services it has a comparative advantage inThe surplus goods are then sold abroad (i.e. exported), creating jobs for UK citizens
12 3.1 Evaluating Trade to the UK Economy Over to you…Open and complete the task below…3.1 Evaluating Trade to the UK EconomyRead through the disadvantages and advantages of trade to the UK economy
13 The Social Impact of Trade We all enjoy having better choice and paying the lowest possible price, however international trade carries a higher price in terms of its impact on the environmentWe call this impact the carbon footprintMany products, such as clothes, toys and cars now carry measurements of their carbon footprintGoods bought from other countries will inevitably require more energy to transport them, increasing their carbon footprintThe full carbon footprint of a product comes from a wide range of emissions sources:Direct emissions of CO2 (using energy in production and transport)Indirect emissions of CO2 – the carbon that is emitted in the prep and transport of raw materials used and employee travel to work
14 Paired Activity: Advantages & Disadvantages of International Trade International Trade clearly comes with both advantages and disadvantages for UK businesses and the UK Economy as a wholeCarlton Francis owns a large video game shop in Middlesbrough. He is considering setting up a new website to sell his products abroad.Carlton has asked you some key questions:Why should I bother to sell my games online?What are the key benefits of selling my products and services abroad?Are there any drawbacks to trading internationally?Write an to Carlton that answers all of his questions.Use the template in the SSAThere is an additional Extension Task in the SSA for the social and environmental impact of trade
Your consent to our cookies if you continue to use this website.