Countries with failing economies find it hard to trade or attract investment. IMF loans increase economic stability, helping those countries to participate in global trade. The World Trade Organisation (WTO) regulates the rules of trade between countries. It’s designed to reduce barriers to trade between countries by setting up agreements where tariffs on trade are either reduced or removed. This increases trade between countries which increases interaction and globalisation.
The industrial revolution had a profound socioeconomic effect on the world, and Britain became its driving force due to its technological advances, such as James Watt’s steam engine; and Abraham Darby’s use of coke to smelt iron ore. These inventions were able to increase the production of goods by cutting down the time and effort needed to make them. There were several effects to Britain, and indeed the world, because of these developments. Britain manufactured products using raw materials. Raw materials do not make as much money as manufactured products on the world market, as a result industrialized countries made more money.
Explain how fiscal policy might be used to bring about supply-side improvements to an economy. [15] K2 K2 K2 K2 Fiscal policy is the manipulation of public spending, taxation and borrowing to achieve the government’s macroeconomic objectives. For example an increase in government expenditure or a reduction in income tax should increase aggregate demand and real output. Fiscal policy is also used to improve the supply-side performance of the economy by affecting incentives to work and incentives to invest. Such policies aim to increase the capacity of the economy to produce more goods and services by increasing the quantity or quality of the factors of production.
The importing industry can increase its output only by attracting more resources from the export industry. 3. Equalization of Costs Argument "We need to neutralize any advantage the foreign producers may have over the domestic producers, in lower taxes, or cheap labor." "We need to equalize the costs of production between foreign and domestic producers." In this way, we level the playing field.
The requirement was to buy fewer foreign products but sell more of their own goods in order to achieve the purpose of maximizing the accumulation of precious metals. However, with the development of commercial economic, the worldwide economic exchanges and the merchandise trade are growing prosperity, but the trade expansion of the competition is increasing. Thus the mercantilists began to promote “Trade Surplus Differential theory” they thought they only need to ensure the sufficient trade surplus in order to increase in national currency. This is the late mercantilism. The center of the late mercantilist is Britain.
Instead grouping nations into High, Middle and Low income is now considered more useful. Some nations are grouped into NICs (newly industrialised countries) NICs are middle income nations where exports and average earnings have risen at unprecedented rate since 1970s. Countries which are placed in that group are Brazil, Mexico and Argentina. A benefit with this type of global grouping is that it establishes a nation’s economic maturity; also it is able to classify stronger more established nations with other nations at similar stages. However there are some limitations which are, it is mostly categorised using nations GDP this can be done by looking at GDP per capita or GDP of nation as a whole, this could become hard to scale.
Mercantilism was an economic theory that increases a nation’s wealth by government regulation. By using the simple strategy of exporting more than a country imported and promoting domestic trade the government creates a monopoly over trade and the nation increases its wealth. Mercantilism played a large role in the colonization of the British North American Colonies for the following reasons. The main economic principle behind mercantilism requires more things to be put out then the country takes in, so raw materials are needed. A good way to get more materials involves finding more land to claim that has the materials on them, thus the British colonization of North America.
Outward-orientated (Export-led) – An outward-oriented growth strategy, based on openness and increased international trade. Growth is achieved by concentrating on increasing exports and export revenue, as a leading factor in the aggregate demand of the country. Non-governmental organizations (NGOs) – They plan and implement specifically targeted projects in developing counties and they act as lobbyists to try to influence public policy in areas such as poverty reduction, workers’ rights, human rights and the environment. MNCs (Multinational corporations) – A corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management.
An economy is the activities related to the production of goods and services within a specified geographic region. This can be on a national scale with the trade and services remaining within a country, but equally, if countries trade goods and services with each other, their economies interact on a global scale, fundamentally known as globalisation. This worldwide interaction of economies is else known as the global economy, with NICs and TNCs play a primary role in changing how it operates. An ‘NIC’ (newly industrialising country) are countries whose economies have not yet reached Developed Country status but have outpaced their developing counterparts in economic terms. The reason for the economic growth in NIC’s is mainly due to the undergoing of export-oriented trade or ongoing industrialization, seen in countries such as China, India, Mexico and Brazil with the experiencing of rapid industrialisation due to the export of goods.
Hollis) lead to an economic domination of the countries as well as economic development faster than would have happened on its own. A famous British economist, J. A. Hobson and following him, Lenin, attributed these colonial expansions of these years to new economic forces at work in the most industrialized nations of western and central Europe. This economic explanation of the urge to imperialism is usually taken to mean that the basic motives were also the basest motives and that, whatever political, religious, or more idealistic excuses might be made, the real impulse was always one of capitalistic greed for raw materials, advantageous markets, good investments, and fresh fields of exploitation. The argument or what Hobson called “the economic taproot of imperialism” was excessive capital in search of investment, and that this excessive capital came from over saving made possible by the unequal distribution of wealth.