low soo peng uk economy
TRANSCRIPT
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The U.K. Economy
Unit 5
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Contents: 1. A Brief Introduction to U.K. Economy
2. Absolute Decline and Relative Decline
3. Recent History
4. The Current U.K. Economy
5. Case Study: The Aerospace
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A Brief Introduction to U.K. Economy
Britain was the first country to start the
industrial revolution in the 18th century.
Britain is a capitalist country.
The characteristic of the economic system of
capitalism is that it protects private
enterprise.
Britain began its market economy about 300
years ago.
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A Brief Introduction to U.K. Economy
Britain is a trading nation.(Why?)
In Britain, the domestic market is limited. So,
it has to find more markets outside the country.
It has to find more markets in the world.
Eg.Each year Britain exports some one-third
of its gross domestic product. It is the fourth
largest exporter in the world. Its exports
account for about 5% of the worlds total trade
volume.
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A Brief Introduction to U.K. Economy
Britain is also one of the worlds largest
importers.
Because Britain lacks raw materials, or we
may say its home supply of raw materials is
inadequate, Britain has to buy up a large
proportion of the raw materials sold in the
world market. Britains major trading partnersare industrialized countries.
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Absolute Decline and Relative Decline
What is absolute decline?
What is relative decline?
Does British economy belong to theformer one or the latter one?
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Absolute Decline and Relative Decline
Britain was the first country in the world to
start the industrial revolution. It took the lead
in the development of economy in the world in
the 19th century. But by 1900, it was overtakenby both the US and Germany.
In the Post-war period, the U.K. economyexperienced boom and bust (the fluctuation of
U.K. economy).
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Absolute Decline and Relative Decline
The reasons of the economic decline:
1) Being in debt;
2) The end of the empire; 3) Large military spending;
4) A catching-up by Germany and Japan;
5) Lack of a close relationship betweenindustry and banks.
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Absolute Decline and Relative Decline
A Characteristic of the UK economy----A
low rate of domestic industrial investment
coupled with a very high rate of overseas
investment.
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Recent H istory
Britains slow growth of productivity, soaring
inflation, and large unemployment gave birth
to the mocking term British Disease.
In 1979, Margaret Thatcher became Britains
first-ever woman Prime Minister. She carried
out an extensive program of privatization. The
new doctrine advocated reduction of taxes soas to stimulate investment and consumption.
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Recent H istory
Thatchers economic policy achieved remarkable
success:
1) Inflation fell to about 4 percent.
2) Britain achieved an average 3 percent increase
in its economic growth.
3) The workers take-home pay increased by 20
percent.
4) Profitability of industrial companies was high.
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Recent History
Thatchers policy was like a coin with two sides:
1) High Unemployment;
2) Widened gap between the poor and the rich;3) High crime rates;
4) Unsatisfactory social services.
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Recent H istory IMF
The IMF (International Monetary Fund) is aninternational organization of 185 membercountries.
It was established to promote internationalmonetary cooperation, exchange stability, andorderly exchange arrangements; to fostereconomic growth and high levels ofemployment; and to provide temporaryfinancial assistance to countries to help easebalance of payments adjustment.
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Recent H istory IMF
Since the IMF was established its purposes
have remained unchanged but its operations
which involve surveillance, financial
assistance, and technical assistancehave
developed to meet the changing needs of its
member countries in an evolving world
economy.
http://www.imf.org/external/np/exr/facts/surv.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/tech.htmhttp://www.imf.org/external/np/exr/facts/tech.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/surv.htm -
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The Current U.K. Economy
Division of the economic sectors:
1. primary industry
2. secondary industry 3. tertiary industries/service industry
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Case Study: The Aerospace
Aerospace industry
Large companies
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Big Four
Lloyds
Barclays Midland
The National Westminster Bank Group