MBA1023 Business Economics: International Trade, Protectionism, Economic Growth, GDP vs HDI

This report covers the definition of international trade, five protectionism tools, three signs of rising international trade, economic growth, its advantages and disadvantages, and the difference between GDP and HDI. It also compares the UK economy with other countries. The subject is MBA1023 Business Economics.

MBA1023 BUSINESS
ECONOMICS

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
(a) Define the international trade and state FIVE protectionism tools....................................................3
(b) State the THREE signs that indicate the rising of the international trade..........................................4
(c) Describe what is meant by economic growth and consider if it is always advantageous or
disadvantageous......................................................................................................................................5
(d) Discuss the difference between TWO economic indicators which is gross domestic product (GDP)
and human development index (HDI) that can be used as a basis of comparison...................................7
CONCLUSION...............................................................................................................................................8
REFERENCES................................................................................................................................................9

INTRODUCTION
The introduction of economic practice and theory to commercial, often known as managerial
economics, is known as business economics. Furthermore, Economic is the feature of social
individuals (e.g., customers and organizations) generating and providing products and services in
the face of resource depletion. Administrative or company economics is a discipline of
economics that deals with structuring and distributing a company's limited resources to attain its
objectives (Dymitrowski, 2020). This report based on the James Steel, chief commodities
strategist at HSBC, said in a webcast organized by the London Bullion Market Association on
Thursday that an increase in global commerce would generate an unfavorable climate for the
price of gold. Growing international commerce, he added, is an indication of worldwide financial
progress, international security, and high customer morale. In this report consist of definition of
international trade and state, identify three signs that indicate the rising of global trade. Along
with define about the economic growth with their advantage and disadvantage compare UK
economy with other country economy in broad manner. At the end of the report define about the
difference between GDP and HDI for the analysis of county economy.
MAIN BODY
(a) Define the international trade and state FIVE protectionism tools.
The interchange or trading of commodities and services across countries is known to as
international trade. This type of trade benefits and expands the global economy. Tv screens,
clothing, technology, raw materials, food, raw materials, and other items are among the most
widely exchanged products. Global commerce, which encompasses commodities including such
transportation, travel and hospitality, financing, manufacturing, telecommunication, marketing,
and advertisement, has grown massively. Increased foreign investors and manufacture of goods
and services in an alternate universe are also exciting changes.
Protectionism in economics refers to a policy that shields home businesses from unlawful
foreign competitors. Tariffs, subsidies, quotas, and trade deficits are really the four main
weapons employed in protectionist measures. Protectionism is a solid position based on political
considerations. It helps in the immediate future, but this can be detrimental to the economy. In
global commerce, protectionism can make the nation and its sectors less efficient. Governments

can also use protectionist measures to shield budding domestic markets from entrenched foreign
competition. There are mentioned different tools that are mentioned below:
1. Tariffs: Tariffs are one of the most ancient tactics used by protectionist countries. They're
an import duties, with the actual amount listed in the 'tariff schedules,' which is a list of
millions of items with varying rates (Lin, He and Yang, 2020).
2. Imports quotas: Import quotas are imposed for a specific length of time – generally a year
– with the same goal as other limitations: to protect global tournament from damaging
native jobs and industry. Because they entirely prohibit items crossing the border, trade
barriers are marginally more successful than taxes.
3. Product standards: In the domains of meal preparation, property rights regulation, and
manufacturing, some nations may have weaker regulatory requirements. This could result
in a manufacturing appropriate standards or a governmental blockade of particular
shipments. Generally, limiting imports via the application of quality control can typically
result in increased local producing goods.
4. Government subsidies: A government subsidies made to domestic manufacturers.
Governments use two types of subsidies in regard to protectionism. First is a domestic
subsidy, which offers funding to domestic providers to ensure them lower costs. It allows
economic products more competitive versus imported by giving them income to support
bring costs down.
5. Exchange rate control: A nation's price level can be manipulated to control the cost of
importation. Shipments, for illustrate, are declining, yet if the promote knowledge in
relation to current liabilities, import tariffs are increasing. A protectionist economy would
try to reduce and/or influence the exchange rate to minimize this.
(b) State the THREE signs that indicate the rising of the international trade.
There is just a handful personal selling that address all five commerce reasons
simultaneously. The reason for this is that such a very framework would be too hard to execute.
Macroeconomic gurus simplify the economy by employing a system with only one motive. This
isn't to say that experts understand a single mechanism or hypothesis can compensate for every
event. However, one must try to understand the planet by looking as to what a variety of
approaches have to say like the same event (Jafari-Sadeghi, 2020).

Differences in technology: When economies' technological capacities to manufacture items /
products differ, they can benefit from each other's commerce. Technology includes the methods
for converting inputs (labour, capital, and space) into products (goods and services)
Differences in resource Endowments: When countries have different financial resources, they
can benefit from one other's commerce. The talents and skills of a nation's labour, the energy
wealth provided well within boundaries (minerals, agriculture, etc.), and the intelligence of its
national wealth are all examples of productive resources (machinery, infrastructure,
communications systems).
Differences in demand: When nations' requirements or tastes different, they can benefit from
each other's commerce. Individuals from various locations may have distinct purchase behaviors
or desires. Even if customers confront the same price, the Chinese are likely to receive more
wheat than Americans. Because if the pricing were the same, Canadians may request more wine,
the Germans more wooden shoes, and the Asians more salmon than American.
(c) Describe what is meant by economic growth and consider if it is always advantageous or
disadvantageous
The growth and development of a nation can be used to assess its overall economic
condition. When compare one span of years to the next, economic growth is defined as a rise in
the amount of economic merchandise (Dvouletý, Srhoj and Pantea, 2020). It can be expressed in
conventional or genuine (inflation-adjusted) values. While alternative energy is sometimes
employed, overall economic growth is generally quantified in terms of gross national product
(GNP) or gross domestic product (GDP). Growth is frequently modeled in business as a
consequence of human assets, productive capacity, labor force, and technological advancements.
Generally said, expanding the amount or quantity of ordinary workers, the equipment they have
at their disposal, and the formulas they have to merge labor, investment, and manufactured goods
will result in higher economic activity.
In its most basic form, economic growth is an increase in a market's total output. Estimated
production improvements are frequently, but not always, associated with higher ordinary
marginal costs. As a result, salaries rise, encouraging individuals to part with their money and
spend more, resulting in increased financial wellbeing or cost of living.

Advantage of economic growth
 The benefit of economic expansion is that standard of living will rise. Economic growth
can help to alleviate poverty by increasing people's wages, which permits them to
purchase basic necessities.
 The increase in employment rates is another benefit of economic progress. Once the
economy grows, money supply grows; causing businesses to hire more people in order to
expand output, resulting in additional job opportunities.
 The companies will be forced to gather more revenues with a bigger GDP because
consumers will know more taxable income and VAT as their salaries rise and they spend
more. This is advantageous since the administration can utilize the tax cash to lower govt
spending and/or invest so much on social public infrastructure development.
 Businesses would be generating more, increased income will result in higher in labor
markets. As a result, unemployed will decrease, leading to lower public expenditure on
compensation and fewer social issues.
Disadvantage of economic growth
 The inflationary effect is a fundamental drawback of economic expansion. Cumulative
demand will rise as the economy grows. If consumer spending goes higher than collective
availability grows, the economy will have an excess of need but a shortage of housing.
As a result, manufacturers will start to increase prices, which are referred to as inflation.
 When the business is in a slump, improving the level of inflation will be a critical step
toward reducing taxes.
 Substantial rises in real gross domestic product can lead to greater racial divides and
inequity. Many of the benefits of development may accrue to a select few.
 Pollution and waste are examples of negative outcomes. Concern of irresponsible
consumption of scarce resources — fast-growing economies may lead to depletion of
natural resources in the longer term.
 Economic growth necessitates the use of a great amount of raw methods to create more
items / products, hastening the degradation of non-renewable resources. Due to
increasing demand, a great volume of resources will be created in a developing nation,
and many trees will be cleared to manufacture goods.

(d) Discuss the difference between TWO economic indicators which is gross domestic product
(GDP) and human development index (HDI) that can be used as a basis of comparison.
For the comparison of UK economy with other country economy use these tools that helps
to carry out all the information in detailed manner and help to measure changes in UK economy
and other nation economy. There are presenting differences in between both tools that are
mentioned below:
The Human Development Index (HDI) is measurement tool that is used to assess a nation's
implementation status in cultural - financial areas. The lives of children, their standard of
knowledge, and their style of life determine a country's socio - economic characteristics. • Gross
Domestic Product (GDP) is the most comprehensive quantitative assessment of a country's
overall economic operations. GDP, in further detail, is the economic compensation of all
products and services generated inside a country's geographical boundaries over a given time
frame.
Over a 15-year period, the HDI will do a superior job of conveying what has been
accomplished than GDP. It demonstrates a more comprehensive aspect of basic growth while
remaining straightforward enough now to be equitable: unlike some other more sophisticated
indexes, the HDI is supported by data accumulated over many generations in many nations. Even
as a measure of value, GDP, on the other hand, falls short. It does not take into account standards
of living inside a nation, such as the wealth gap or occurrences of political and social intolerance.
It also ignores the means of wealth rise in the concentration, like that of the negative
consequences of extractive industries. In this perspective, GDP should be viewed as a function of
economic growth rather than a measurement of living standards.
Considering this, many countries started to use GDP to measure their standard of life and
‘improvement,' which is understandable. Gdp is the total value of a national economy that was
devised in the 1930s to take into account the quality of goods and services generated inside the
region.
The data necessary to calculate GDP is generally easy to come by, and the calculations are
simple. Furthermore, this fairly restrictive concept of wealth is simple to implement globally,

which explains its widespread use as a measure of overall happiness. Legislators continue to use
it as their primary indication. The HDI places larger views on individual growth than the GDP. It
considers a nation's standard of living as well as its manufacturing capability. A country's health
and education are regarded as equally essential as its financial strength. GDP is viewed as a
means, not even an endpoint, to human growth. GNI per capita, which again is effectively the
real income of the ordinary individual, is one of the factors used to calculate the Human
Development Index. The Human Development Index, rather than GDP, provides a more
comprehensive assessment of a society.
CONCLUSION
As per the above report it has been concluded that Business economics examines the
behaviour of private enterprises acting in various market structures. It develops on a variety of
themes previously explored in competitive information and market breakdowns, and it
encompasses notions and difficulties sometimes alluded to as "firm theory."

REFERENCES
Books and Journal