Net Trade (X-M) Flashcards
1
Q
Determinants of Demand for imports & exports
6
A
Real income - 25% of spending is imports in the UK
Global economy - Strong = more exports. 40% of UK exports went to the Eu as of 2017
Price - Poor price competitivity meant British textile and clothing exports fell greatly, couldn’t compete w places such as China
Exchange rates - high exchange rate (strong pound) means exports will fall and imports rise, vice versa
Trade barriers - i.e. tariffs (tax on imports), quotas (physical limit on imports) etc. e.g. we have no trade barriers with the EU, but this may change after Brexit.
Non-price factors - e.g. Design, quality, reputation.
e.g. Lockheed martin (military equipment), Germany renowned for engineering & Cars
