Macroeconomic

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European Union: group of countries that comprise a customs union across regions in Europe. Older member like France, recent member Poland, larges single market in world it accounts 40% of global trade. Free trade with no barriers. Product sold one country to another with no tax. Joined in 1973 5th largest economy in world UK. Easier to access customers in other market, does not need to modify product to meet domestic regulation, cheaper trade with union encourage investment. Enlargement of EU: immigration is a key issue. 28 countries. Business and individual don’t have exchange rate costs. More predictable coz one currency. System need to be change accept new coin. Exchange rate one country currency to another. Exchange rates impact heavily and regulated on trade. EU enlargement advent – Economic growth: new state market economy generate increased productivity single market increased trade old state trade investment increase with new states. Stability: Political stability EU membership bring to new democracies. Global presence: stronger global voice brought the population more. Foreign direct investment: EU member and euro will increase the amount of FDI in the new states member. Disadvantage- migration: unemployment is high. Common agriculture policy: extended to new member of states. EU standard system: not have necessary standard system in place eg food hygiene.

Globalisation is the increasing integration of national market and expansion of international trade and investment. Result global trade has massive influence on most countries economy. Peace of globalisation e.g. technology internet made it easier to communicate. Investment money product service labour around world. Business growth increased capita; mobility. Export v import advent is the fundamental force that drives international trade. Eg producing car lower in japan than UK. UK produce chemical at lower than japan so UK comparative ad in producing. Japan buy chemic from UK and UK buy japan car. Tariff: tax imposed by importing leather jacket from china. Price imported cars rises. Quantity cars produced UK rises. Government collect tariff revenue. Export: government domestic producer of export good to help compete with foreign firms eg EU AND US in past domestic sugar firm. They lost export sales and export income, they can’t compete with wealthy countries. Advantage- producers benefit from economies of scale as they have access to larger market, more jobs, Dis branding increase barriers to entry