LO1
Higher National Diploma BTEC
Unit 35: European Business
Tutor: Solomon
Learning Outcomes
At the end of this session, learner should be able to
• Explain the importance of international trade to an open economy such as the UK.
• Assess the significance of comparative advantage, absolute advantage, the terms of trade and exchange rates. • Describe the structure of balance of payments.
• Explain the terms ‘surplus’ and ‘deficit’ and the significance of long-term deficits to open economies.
Background of international Trade
• This came about due to the fact that resources of trade were not evenly distributed through out the world. Mobility of the factors of production is limited, some countries produce better products than others, some could not also produce a particular product due to weather conditions or poor soil fertility etc, as a result the term free trade was introduced by countries for easy movement of goods/services across borders.
What is International Trade
• This simply means exchange of raw materials and manufactured goods/services across national borders.
• This is different from trade within a country because it takes place across national borders/boundaries and it involves key things such as: international payments, international market structures, exchange rate and balance of payments.
What is International Trade
• All of us are affected by global trade in goods and services be it your flight to an overseas holiday destination; your purchase of a music download from an overseas web site or a business importing new technology.
• Trade is huge and, over the last twenty years world trade has been growing quicker than expansion of the internal economies of countries around the globe.
The UK business
• The UK is a developed nation with lot of business opportunities, yet UK alone can not stand on its own in some areas of the market.
For example Britain can not produce minerals that are not home-grown or fruits that can only be grown in tropical
Unit 35: European Business
Tutor: Solomon
Learning Outcomes
At the end of this session, learner should be able to
• Explain the importance of international trade to an open economy such as the UK.
• Assess the significance of comparative advantage, absolute advantage, the terms of trade and exchange rates. • Describe the structure of balance of payments.
• Explain the terms ‘surplus’ and ‘deficit’ and the significance of long-term deficits to open economies.
Background of international Trade
• This came about due to the fact that resources of trade were not evenly distributed through out the world. Mobility of the factors of production is limited, some countries produce better products than others, some could not also produce a particular product due to weather conditions or poor soil fertility etc, as a result the term free trade was introduced by countries for easy movement of goods/services across borders.
What is International Trade
• This simply means exchange of raw materials and manufactured goods/services across national borders.
• This is different from trade within a country because it takes place across national borders/boundaries and it involves key things such as: international payments, international market structures, exchange rate and balance of payments.
What is International Trade
• All of us are affected by global trade in goods and services be it your flight to an overseas holiday destination; your purchase of a music download from an overseas web site or a business importing new technology.
• Trade is huge and, over the last twenty years world trade has been growing quicker than expansion of the internal economies of countries around the globe.
The UK business
• The UK is a developed nation with lot of business opportunities, yet UK alone can not stand on its own in some areas of the market.
For example Britain can not produce minerals that are not home-grown or fruits that can only be grown in tropical