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National & Global Economy

GCSE ECONOMICS: UNIT 11. National & Global Economy. Understanding International Trade. Aims of today’s lesson …. Identify the main types of exports from, and imports to, the UK economy Analyse the importance of trade to the UK economy

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National & Global Economy

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  1. GCSE ECONOMICS: UNIT 11 National & Global Economy Understanding International Trade

  2. Aims of today’s lesson … • Identify the main types of exports from, and imports to, the UK economy • Analyse the importance of trade to the UK economy • Candidates 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 Trade • Globalisation • BOP Deficit • BOP Surplus • Complete this using the task sheet called ‘3.1 Understanding international trade’ in the SSA

  4. International Trade • Each year the UK trades a high value of goods and services with other countries • Exports (X) are goods and services that the UK sells to buyers in foreign countries e.g. Jaguar cars • Imports (M) are the goods and services the UK buys from other countries Q. What items do we regularly buy which may be imported from foreign countries?

  5. What are goods & services? • Goods are things like televisions or cameras, which can be physically handled • Goods are often referred to as visibles • Services 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 Trade • Forecasters predict that UK trade with the rest of the world will grow substantially over the next 15 years • It is anticipated that merchandise trade volumes in 2025 will be $1,360.7billion increasing from their levels at the end of 2010 of $933.7billion • On these figures alone you can see how much international trade is worth to the UK Economy • A 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. Over to you… • Open and complete the task below… 3.1 Understanding International Trade

  8. Balance of Payments • Calculate the BOP for the selected goods, services in the table below… • What is the overall BOP?

  9. Balance of Payments • When 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 economy • Each 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 services • This is known as Comparative Advantage • Through trade the UK can specialise in produce those goods and services it has a comparative advantage in • The surplus goods are then sold abroad (i.e. exported), creating jobs for UK citizens

  12. Over to you… • Open and complete the task below… 3.1 Evaluating 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 environment • We call this impact the carbon footprint • Many products, such as clothes, toys and cars now carry measurements of their carbon footprint • Goods bought from other countries will inevitably require more energy to transport them, increasing their carbon footprint

  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 whole • Carlton 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 email to Carlton that answers all of his questions. • Use the template in the SSA

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