Net trade 2.2.5

Question 1

influence of real income on net trades

Answer 1

if income rises within an economy, there tends to be increased imports as people will demand more goods and services as the UK is unable to meet their needs. This reduces the net trade.

Question 2

influence of exchange rate on net trades

Answer 2

a strong pound makes import cheap and exports dear because it cists foreigners more to buy pounds with their local currency. imports increases and exports decreases. so net trade decreases.

Question 3

influence on the state of the world economy on net trades

Answer 3

if the UK main export country is doing well, then UK exports are likely to rise and so net trade is likely to increase. the effect of the state world economy is dependent on which countries that are doing well and the trade relationship the UK has with them.

Question 4

influence of the degree of protectionism on net trades

Answer 4

if there are high tariffs, quotas or other restrictions on trade, then firms will find it difficult to export to certain countries

Question 5

influence of Non price factor on net trades

Answer 5

two no factors which effect net trade is quality and design and marketing. if UK goods are of a higher quality and design, exports will be high as foreign demand for UK will increase and imports will decrease as people will buy British goods instead of foreign goods.