Post on 10-Jan-2016
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SECTION 3NATIONAL & GLOBAL
ECONOMY
National & Global Economy
GCSE ECONOMICS: UNIT 11
Understanding International Trade
SECTION 3NATIONAL & GLOBAL
ECONOMYAims 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
SECTION 3NATIONAL & GLOBAL
ECONOMYKeywords 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
SECTION 3NATIONAL & GLOBAL
ECONOMYInternational 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?
SECTION 3NATIONAL & GLOBAL
ECONOMYWhat 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
SECTION 3NATIONAL & GLOBAL
ECONOMY
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
SECTION 3NATIONAL & GLOBAL
ECONOMYOver to you…
• Open and complete the task below…
3.1 Understanding International Trade
SECTION 3NATIONAL & GLOBAL
ECONOMYBalance of Payments
• Calculate the BOP for the selected goods, services in the table below…
• What is the overall BOP?
SECTION 3NATIONAL & GLOBAL
ECONOMYBalance of Payments
• When we include other goods and services the imbalance (in this case, the deficit) isn’t as severe…
SECTION 3NATIONAL & GLOBAL
ECONOMYPlenary: 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!
SECTION 3NATIONAL & GLOBAL
ECONOMY
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
SECTION 3NATIONAL & GLOBAL
ECONOMYOver to you…
• Open and complete the task below…
3.1 Evaluating Trade to the UK Economy
SECTION 3NATIONAL & GLOBAL
ECONOMYThe 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
SECTION 3NATIONAL & GLOBAL
ECONOMY
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