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Macro economics - Coursework Example

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The UK can grow its economy by producing more and increasing its exports in order to boost its net trade. By reducing on imports and increasing…
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Macro economics
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UK Economy For every country to grow economically, it is important to increase the capa of the goods and services produced in that country. The UK can grow its economy by producing more and increasing its exports in order to boost its net trade. By reducing on imports and increasing the exports, the UK will be in a position to reduce its trade deficit, which is a problem that has been hurting the economy for many years.
When the UK increases its share of exports, it will be in a position to grow its local industries. This is because the increased demand for UK exports accelerates local production, and this helps grow local products and jobs. For instance, this will help boost the manufacturing sector which has faced competition from other countries such as china and the United States. One of the major benefits of the increased growth in exports is reduction in unemployment. Many individuals will be in a position to find jobs in most sectors in the economy due to increased demand of goods and services. Sectors that have been dormant for many years will be revived as a result of increased exports.
By increasing exports, the UK will ensure that the cost of these exports is substantially reduced and the quality is enhanced. For example, The UK can achieve to reduce the cost of its exports by reducing the wages. When this happens, the UK will become attractive to other countries, and this will lead to more exports. In addition, by increasing the exports and making them cheaper and of higher quality, the UK will ensure that the population buys local products as opposed to relying on imports. The increase in domestic demand is important for economic growth.
Increase in exports will also make the UK currency more valuable compared to other countries in the global economy. If the UK is importing more than exporting, it simply means that it selling its currency in order to buy the foreign currency so that it can import the goods and services. This has the effect of making the exports more expensive and making the imports cheap. In the end, domestic buyers will be encouraged to buy from outside markets. However, when exports are made cheaper, the currency becomes strong, making the UK competitive in the global market. Local manufacturers and service providers are therefore likely to find overseas markets when the currency is strong.
Finally, increases in exports and reduction in imports will have a major effective on innovation and creativity. Local firms and individuals will be encouraged to enhance the quality of existing products and services through innovation due to the growth in demand. In addition, these firms may come up with new products and services which are aimed at meeting the demands of the market better. In a global competitive economy, the UK can boost its economic growth through innovation and creativity brought about by increased demand for exports. In addition, through increased exports, the UK will be in a better position to enter into economic partnerships with other foreign firms or organizations. This will help grow the local firms and boost their overall productivity. Read More
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