Capital Allocation in Domestic and International Economy

INTERNATIONAL TRADE
FINANCE AND INVESTMENT

EXECUTIVE SUMMARY
Capital allocation is the process of assigning the various financial resources such that it
can impact the growth and prosperity of the country's economy. This report presents about the
capital allocation within the domestic and international economy in the world. The project
considers the UK economy which follows the mixed economy where government is active in
certain sectors and in the remaining the private institutions are handling. These sectors are
contributing to the GDP, international trade and the inflation in the economy. It shows the
current status of the UK economy and the rate of prospective growth in the future. The Brexit
policy and the free trade agreements with EU are some major challenges that are faced by the
UK economy and are leading to barriers in the growth.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1a) Allocation of capital within domestic economy and internationally for trade, investment
and development purpose with the help of financial market.......................................................1
1b. Mixed Economy of United Kingdom....................................................................................6
Challenges faced by UK due to industrialization and trade policies.........................................11
CONCLUSION..............................................................................................................................12
RECOMMENDATIONS...............................................................................................................13
REFERENCES..............................................................................................................................14
Online ........................................................................................................................................15

INTRODUCTION
International trade refers to the transactions of buying and selling of goods taking place
across borders in the form of exports and imports. It has increased with the evolution of
globalization in the economies. The project shall be showing the allocation of the capital within
the domestic and the international economy. Apart from that it shall also show the mixed
economy of UK, how it operates and what is the current status of the economy. Lastly it shall be
suggesting certain recommendations that should be improvized in the UK economy.
MAIN BODY
1a) Allocation of capital within domestic economy and internationally for trade, investment and
development purpose with the help of financial market
Background of financial market
Financial market is crucial part of any economy that help the country to be in position of
efficient flow of money, increment of capital and growth of economy can take place. The
current report give emphasis on UK which is mixed economy. UK is hub for financial institution
for fund management. it has become such a centre for banks and investors that it is first priority
to invest in financial market.
The word financial securities' industry refers to the market where securities are traded by
investors. In economy of money creation and flow is undertaken by financial Service Authority
(FSA) (What is trade finance? 2021). All the Important decision regarding financial service
industry is taken by FSA. British government has taken the action of making complex group. In
which FSA is on top that deals with top major financial establishment and regulatory bodies.
Financial market is the market where buyers and sellers meet to sell or buy securities
there are mainly five types of financial markets such as Over the counter in which they manage
small institutions that can be traded in low-budget and are within less regulatory framework. The
second type is bond market in which investors loan money on the basis of securities with specific
interest rate. Another type is money market in which they trade high liquity securities that can be
mature in less than one year. Fourth is derivative market, this the place where measure of
securities is ascertained from its primary assets. The last type is forex market where investors
trade in currencies.
There are two types of capital market like primary and secondary. In primary market new
securities are issued in way of IPO in order to fulfil capital requirement of company and in
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