Imports Exports and the Balance of Payments

Readers Question: What counts as an import on the Balance of Payments Current Account measures trade in:Goods, Services, Investment incomes Net TransfersA Debit on the credit account occurs when the UK imports goods and therefore money flows from the UK to oversees to purchase it. If debits are greater than credits the UK will have a current account deficit. Examples of debitsUK consumers buy Chinese manufactured toys UK consumers go on holiday to China A Chinese firm in the UK sends back profits to China. UK firms import raw materials from China.


The Rise of Globalisation

Explaining the Growth in Globalisation Globalisation refers to the increased integration and interdependence of the world economy’s. These are some reasons to explain the growth of globalisation 1. Increase in Free Trade. Since the second world war, tariffs have generally been reduced. This has been encouraged through organisations such as the WTO. This has increased trade between different countries; this is an important factor in the process of globalisation. 2. Technology Technology has improved communication between different countries. Therefore, it has become easier to split up production on a global level. It is also…