, Contents
Executive summary....................................................................................................................3
Introduction...........................................................................................................................................4
1. Explain the composition of the UK balance of payments.......................................................5
2. Referring to UK trade figures from the past 30 years, explain the general trends in UK
trade over that period........................................................................................................................... 6
3. Explain how the balance of payments is affected by the exchange rate............................... 7
4. Select two of the following and identify three advantages and three disadvantages with
each:....................................................................................................................................................... 8
Fixed exchange rates 8
Floating exchange rates 8
The UK adopting the Euro as the national currency 8
5. Outline three effects on individuals and three effects on businesses for each of the two
exchange rate regimes selected in question 4................................................................................. 10
Conclusion.......................................................................................................................................... 11
References........................................................................................................................................... 12
2
Executive summary....................................................................................................................3
Introduction...........................................................................................................................................4
1. Explain the composition of the UK balance of payments.......................................................5
2. Referring to UK trade figures from the past 30 years, explain the general trends in UK
trade over that period........................................................................................................................... 6
3. Explain how the balance of payments is affected by the exchange rate............................... 7
4. Select two of the following and identify three advantages and three disadvantages with
each:....................................................................................................................................................... 8
Fixed exchange rates 8
Floating exchange rates 8
The UK adopting the Euro as the national currency 8
5. Outline three effects on individuals and three effects on businesses for each of the two
exchange rate regimes selected in question 4................................................................................. 10
Conclusion.......................................................................................................................................... 11
References........................................................................................................................................... 12
2
