Revision Notes

External Economic environment

The economy is made up of the primary, secondary and tertiary sectors. Primary = agriculture.
Tertiary is the major employer: 65% males and 88% females in tertiary.
International trade: imports (goods coming in) exports (goods going out. Imports/exports may be visible (fridges, cars) or invisible (services: tourism; insurance)
Governments may erect import controls - tariffs (tax), quotas (numerical restriction), exchange controls (limiting the amount taken out of the country). Overall purpose being to protect jobs and overcome a balance of payments deficit. (Deficit is where outflow > inflow - probably though not necessarily, imports > exports)
European market: Single Market (physical, fiscal and technical barriers removed). Opportunity for firms to expand; threat from competition.
Common standards; open markets; freedom of movement of capital, labour and goods.
Note: current debate over single currency.
Unemployment/inflation: tend not to coexist.
Economic growth: increase in the output of the economy
Policies hinge on injections (government spending, exports and investment) and withdrawals (savings, imports and tax) being manipulated to boost or contract the economy. Boost to overcome unemployment; contract to reduce inflation.