Adam El Masmoudi Garcia
P3
There was a time when most regions were economically self-sufficient. Locally
produced foods, fuels and raw materials were generally processed for local
consumption. Trade between different regions was quite limited.
Today, the economies of most countries are so interconnected that they form part of a
single, interdependent global economy. The world economy has become increasingly
interdependent. However, in recent decades the process of globalisation has accelerated;
this is due to a variety of factors:
Transport – Improving transport has make global travel easier. There has been a rapid
growth in air-travel, enabling greater movement of people and goods across the globe.
Technology - Technology during the years has improved, and now, it easier to
communicate and share information around the world. Costs have fallen due to
improvement as now firms are able to communicate for free to anyone, anywhere in the
world. With apps like Skype or WhatsApp they can call for free or make a video
conference to discuss a problem with suppliers. An example of this could be Aston
Martin, which its headquarters are located in Gaydon and its suppliers may be located in
Hong Kong, if Aston Martin is seeing that the pieces they are producing are not up to
the standard, they may have a meeting through Skype and ask them why they are
producing this type of pieces when they wanted others. By doing conferences through
Skype, they may avoid confusion as they will get the point clearly and what they expect
from them. They will also save the cost of travelling to Hong Kong and the time which
would’ve been wasted in that, and by this the cost have fallen dramatically and this
money saved can be invested into the business to make it grow even more or into new
projects.
Capital markets - They are more global now, which this has led to be much easier to
borrow internationally and attract overseas investment. Capital markets include primary
markets, where new stock and bond issues are sold to investors, and secondary markets,
which trade existing securities. Capital markets are vital to the functioning of an
economy, since capital is a critical component for generating economic output. An
example of a capital market in London would be the London Stock Exchange Group
which provides access to capital for domestic and international businesses and efficient
electronic platforms for secondary market trading of equities, bonds and derivatives.
Trade liberalisation – Encouraging free trade, removing trade barriers such as: taxes,
quotas, subsidies.
Trade blocs - (ASEAN, NAFTA, EU), these are examples of free trade movement
between members states (countries). Trading blocs have reduced national barriers. The
UK at present may lose access to EU single market if Brexit doesn’t negotiate a trade
deal. The single market is based on the principle of free trade - specifically, removing
barriers like tariffs and allowing the free movement of goods, capital, services and labor
across borders. If the UK doesn’t negotiate a deal with the EU, the impact of this, which
could lead to a fall in profit from big English manufacturers such as Aston Martin,
Jaguar, as their raw materials, may come from Germany, for example. Since free trade
between UK and EU will no longer be prevalent, the costs of your supplies hike up.
P3
There was a time when most regions were economically self-sufficient. Locally
produced foods, fuels and raw materials were generally processed for local
consumption. Trade between different regions was quite limited.
Today, the economies of most countries are so interconnected that they form part of a
single, interdependent global economy. The world economy has become increasingly
interdependent. However, in recent decades the process of globalisation has accelerated;
this is due to a variety of factors:
Transport – Improving transport has make global travel easier. There has been a rapid
growth in air-travel, enabling greater movement of people and goods across the globe.
Technology - Technology during the years has improved, and now, it easier to
communicate and share information around the world. Costs have fallen due to
improvement as now firms are able to communicate for free to anyone, anywhere in the
world. With apps like Skype or WhatsApp they can call for free or make a video
conference to discuss a problem with suppliers. An example of this could be Aston
Martin, which its headquarters are located in Gaydon and its suppliers may be located in
Hong Kong, if Aston Martin is seeing that the pieces they are producing are not up to
the standard, they may have a meeting through Skype and ask them why they are
producing this type of pieces when they wanted others. By doing conferences through
Skype, they may avoid confusion as they will get the point clearly and what they expect
from them. They will also save the cost of travelling to Hong Kong and the time which
would’ve been wasted in that, and by this the cost have fallen dramatically and this
money saved can be invested into the business to make it grow even more or into new
projects.
Capital markets - They are more global now, which this has led to be much easier to
borrow internationally and attract overseas investment. Capital markets include primary
markets, where new stock and bond issues are sold to investors, and secondary markets,
which trade existing securities. Capital markets are vital to the functioning of an
economy, since capital is a critical component for generating economic output. An
example of a capital market in London would be the London Stock Exchange Group
which provides access to capital for domestic and international businesses and efficient
electronic platforms for secondary market trading of equities, bonds and derivatives.
Trade liberalisation – Encouraging free trade, removing trade barriers such as: taxes,
quotas, subsidies.
Trade blocs - (ASEAN, NAFTA, EU), these are examples of free trade movement
between members states (countries). Trading blocs have reduced national barriers. The
UK at present may lose access to EU single market if Brexit doesn’t negotiate a trade
deal. The single market is based on the principle of free trade - specifically, removing
barriers like tariffs and allowing the free movement of goods, capital, services and labor
across borders. If the UK doesn’t negotiate a deal with the EU, the impact of this, which
could lead to a fall in profit from big English manufacturers such as Aston Martin,
Jaguar, as their raw materials, may come from Germany, for example. Since free trade
between UK and EU will no longer be prevalent, the costs of your supplies hike up.
