• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

What are the important elements of International Trade

Extracts from this document...

Introduction

What are the Important Elements of International Trade In this piece of work I am going to discuss the important elements or factors of international trade. Firstly, let's start with the elements of international trade. They are; * Balance of payments * Visible trade * Invisible trade * Trade gap * Correcting a deficit * Exchange rates * Why countries trade? * Adam Smith (The man who came up with the theory) * Who Britain trade with I will first start with Balance of Payments and explain what this term means. Firstly, the purpose of the balance of payments is to record all of the financial dealings with foreigners. The balance of payments is made up of 3 things; invisibles, visibles, and the current account. The current account shows the income and expenditure for the UK over a period of time. The UK's income is the money received from exports of visibles (goods) and invisibles (services). Its expenditure I the money paid to foreigners for imports to the UK. The balance of payments must always balance hence the name. This means that the money you spend must equal the money you get back. I.E. the money leaving the country for imports must equal the money coming back in from exports. If it doesn't and you have purchased more imports than exports this is called a deficit. ...read more.

Middle

Other ways that you could bring the gap to be balanced would be to offer better quality products so that more people would want them causing more exports. They would go up like this. Other ways of closing this gap would be UK companies advertising abroad, the government could subsidise UK exporters and also you could have car shows to bring foreign people over to buy our cars. Other ways of bringing the import gap down would be to have a tariff - import duty, and import quota which would limit the amount you can import, and embargo but other countries may retaliate, and also and exchange control, which is limiting the amount of foreign currency used. There is however a certain type of import control that isn't allowed or has to be agreed upon. This is called GATT which stands for General Agreement on Tariffs and Trade. This means that countries have to agree to reasons for allowing import duties. The next type of element that I am going to do is exchange rates. First of all an exchange rate is the amount of foreign currency you can get for your money. If you were to go on holiday to Italy you would want your great British pounds to be changed into the euro. ...read more.

Conclusion

In this final part of my essay I am discussing the European Union. Britain is part of the E.U (European Union) which is an organization consisting of 25 independent, democratic member states which will be 27 as of the 1st January 2007. Britain can trade for free with all the members of the EU but if you are outside of the European Union then you have to pay to trade. Think of it as paying to get over a wall into a cool group. All of the members in the EU pay annually into an EU fund based on GDP (Gross Domestic Product), which is the Wealth of the Nation. The common currency in the European Union is the Euro and 12 out of the 25 use it, 13 out of 27 as of the 1st January 2007. There are benefits for trading within the EU; benefits such as if someone from for example Poland wanted to come and work in the UK then you wouldn't' have to pay them the maximum wage so you can imagine if there are more and more people working in the UK then we don't lose as much money as we would if we were paying people who are from the UK. In my essay I have covered the points that are included in the topic of International Trade. I think I have fully expressed each point to my best ability and I hope I have made it clear. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. It was suggested by Adam Smith in 1776 that individuals led by self interest, ...

    It is the consolidated sum of current and capital expenditure of central and local government, and public corporations. TME can also be used to measure the budgets of public sector bodies as it gives a total expenditure by department. All three of the above according to the golden rule will be funded by taxation and not by borrowing.

  2. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Zheman would be better off citing specific examples of these moral atrocities to give his argument more credibility. Then the reader would have actual people to vilify, instead of a broad group of policy makers. Mike King does not feel that Zheman did a proper job presenting both sides of the marijuana debate.

  1. The Famous Grouse - company profile and exports

    Problems may arise from transporting such a far distance. Germany Head of Government: Chancellor Gerhard Schroeder Capital: Berlin Population: 82,424, 609 German History As Europe's largest economy and most populous nation, Germany remains a key member of the continent's economic, political, and defence organizations. European power struggles immersed Germany in two devastating World Wars in the first half of

  2. International trade with WTO and AFTA

    in terms of export competitiveness, attractiveness as an investment location, human resource capability and ICT capability and preparedness. The four key constraints to long run growth and competitiveness are 1) investment climate is weakened by regulatory burden, 2) services sector is highly regulated, 3)

  1. Selecting international modes of entry and expansion

    We found that there are some important differences that can help managers learn how to better determine modal choices. Target market factors are generally more important to Japanese firms than company factors; whereas, company factors seem most important to US firms, when making modal choices.

  2. Overview of Intercontinental Hotels Group

    They are widely recognized due to their broad range of brand portfolio which specifically target niche market in order to satisfy customers' needs and expectations. InterContinental invests a large amount of money annually in order to streamline process, cut unnecessary work and achieve high level of economics of scales which makes them more cost saving from their competitors.

  1. Economics of European Integration

    According to their website3, "IFIEC Europe represents between 75% and 80% of the industrial energy consumption in Europe, in industries such as steel & alloys, chemicals, non ferrous metals, cement, pulp & paper, food & packaging, automobile, etc". In this paper we aim to discuss the point of view of

  2. How Do Dixon's Dominate The Electrical Trade?

    produce more, the country cannot provide more money for people who work, therefore they are not able to spend on products from other companies which are not really necessary in everyday life. Furthermore if most of the population of the company is not spending their money on certain products the standard of living stays low.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work