ECONOMICS
BRITAIN
General facts
- GDP: $232,137 billion (6th/200)
- 1st country to start industrial revolution in
18th century
- Capitalism country  Characteristic:
protects private enterprise
- Began market economy: 300 years ago.
- A trading nation (domestic market is limited
 find more markets)
- One of the largest importers (lack raw
materials  buy outside. Major partners:
industrialized countries & the
Commonwealth contries)
Industry - A trading nation
- Import (4th largest): Raw materials; 40%
food supply
- Export (3rd largest): Manufactured goods
(Products: manufactured goods, fuels,
chemicals, food & beverages, tobacco)
- Main industrial and commercial area:
Conurbations (1/3 of population’s lives)
- The administrative and financial center &
most important port: Greater London
Economic decline
- Performance viewed with pessimism:
insufficient investment, inadequate technical
training, poor relations & inept management
- 1st country of 18th century industrial
revolution, & led the world economy in 19th
century BUT by 1900, overtaken by US &
Germany
- Post-war period: UK economy boom & bust
- Reasons:
 Being in debt
 The end of empire
 Large military spending
 The catching up of German & Japan
 Lack of close relationship between
industry & bank
- A characteristic: Low rate of domestic
industrial investment + High rate of overseas
investment
Recent history
- Situation  Thatcherism:
 Slow growth of productivity, soaring
inflation, large unemployment 
AMERICA
General facts
- World’s leading producers of g & s
- Leading industrial and technological products
- Major products: machinery, automotive
products, aircraft, chemicals
- Since 1971, import > export
- Shift from manufacturing  services
- Farming: Highly mechanized and
commercialized  15% the world’s food need
- Labor: 151.8 mil (4.4% unemployment)
US import - export balance  Trade deficit
- The world’s largest importer & exporter
- Since 1971, import > export
- Import
 $1.727 trillion
 Partners : Canada, China, Mexico, Japan
 Goods: industrial supplies (most)
- Export
 $927.5 billion
 Partners: Canada, Mexico, Japan, China
 Goods: capital goods (most)
A free enterprise
- US economy: free enterprise system, allows
private business freedom to operate for profit
with minimum gov interference & regulation
- Laissez faire (leave it alone): individuals,
motivated = self- interest, allow to pursue profit
freely  result is good for the society
- Role of Gov:
 19th century: minimum
 From 1930s: regulation exists in many
business areas
Favorable condition
- Natural resources:
 Rich mineral, fertile farm soil
 Moderate climate
 mocking term “British Disease”  Extensive coastline (Atlantic, Pacific,
 1979: Margaret Thatcher 1st woman Gulf Mexico)
Prime Minister carried out extensive  River flow, Great Lake  shipping
program of privatization (advocate access
reduction of taxes  stimulate - Labor:
investment & consumption)  Promise of high wages  skilled
- Success: workers
 Inflation fell to 4%  Availability & productivity
 Average 3% economic growth - Manufacturing & investment:
 Worker’s take-home pay increased  Corporation: associated owners
by 20% (stockholders) form business enterprise
 High profitability of industrial coms governed = complex rules, customs
- Problems:  American investors & corporations
 High unemployment influence the world
 Widen gap btw the poor – the rich
 High crime rates
 Unsatisfactory social service
- IMF (International Monetary Fund)
 185 members
 Operation involves: surveillance,
financial assistance, technical
assistance
Current UK economy Budget deficit
- Division of economic sectors: - Since 1930: spend > take
 Primary industry (extraction raw - Lead to:
materials)  Inflation
 Secondary industry (manufacturing)  High interest rate
 Tertiary industry (services)  Unemployment
 The three-sector theory: the economic
theory which divides the economy into 3 Challenges facing US economy
sectors of activity (as below) - 2008 Economic crisis:
- Main focus: Primary  Secondary   High oil price
Tertiary  High food price
 Low per capita income countries  Global inflation
(early state of development)   Credit crisis
national income from production in  Unemployment
primary
 More advanced state of development,
medium national income: secondary
 Highly developed countries with high
income: tertiary
- Main industries:
 Algri: 1% (20% land arable, 50% for
meadows and pastures, mechanized
and productive, 2% labour force 
60% nation food needs, sizable
fishing industry)
 Industry: 26%
 Services: 73% (3.5 million service-
related jobs, including: banking,
 insurance, business services)
Attitude to work
- Lack enthusiasm for work
 Leisure = sign of aristocracy
 Non-manual job = sign of middle
class
 Working day: starts late (8am
manual, 9am non-manual)
- High earnings > Job satisfaction
- Not adventurous shoppers
 Like reliable + brand names
UK employment law
- Legal working age: 13
- Under 15 (Holidays: max 25h)
- Over 15 (Max 35h)
- Jobs for teenagers
 Work permit required
 Wage: up to 3 pounds / h
 Under 18: no law protection
regarding wage rates
Characteristics of American Business – Values
- Private & profit
- Businesses are directly or indirectly owned &
operated by private individuals  make profit
Reason Price to be paid
Individual freedom Self-reliance
Equality of opportunities Competition
Material wealth Hard work
Entrepreneurs
- Who built up great industry
- Start with nothing & end up with virtually
everything
- Perfect heroes, reflect American dream
- Ect: Henry Ross Perot, Bill Gates
Organization man/woman
- Who run already-established business
- Wealth & power, model of success
- No strong hero image
- Ect: Malcolm Stevenson Steve Forbes, Lindo
Lee Lacocca