ASSIGNMENT 5

Assignment 5



Assignment 5

Answer 1A)

The United Kingdom is a country with a market economy, the fourth-largest in Europe (after Germany, France and Italy), and the seventh largest market in the world (after the United States, Japan, and China). In the past two decades, the British government has made privatization of many state-owned enterprises, leaving a large extent on the so-called rule the welfare state (welfare state). The largest share of the UK GDP to services, especially banking and insurance, and thanks to the rich deposits of oil and gas, United Kingdom plays a significant role in the global production of raw materials (4% of world oil production in 2009). The UK economy is considered one of the most liberal economies in the European Union (Prest, 1976).

In 2008, the British economy has succumbed to the global financial and economic crisis. During 2009, observed a further deterioration in the economic situation. In macroeconomic terms, the UK economy after the deep recession of 2009-10 is still not back on the path of sustainable growth. After a decline in GDP in the last quarter of 2011 (- 0.3%) quite unexpectedly to most economists, the results on a quarterly basis for the first quarter of this year. point to a drop in GDP of 0.3% (annualized first quarter of 2012 ended with a fall in GDP of 0.1%). Results for the second quarter of 2012 are not optimistic - there was a decline in GDP of 0.5% (Harris, 1989).

Services sector especially banking, insurance and business services, contributes largest to the creation of British GDP. Industrial production is gradually losing its importance. The main industries are: manufacture of machinery and equipment, electrical equipment, equipment for railways, shipbuilding, aerospace, manufacturing of motor vehicles and their parts, electronic and telecommunications equipment, metallurgy, chemical, coal and oil, paper, food processing food and textile industry. Agriculture is a modern, highly mechanized and provides about 60% of the country's food.

UK Government continued in the current year budget savings program while driving by the Bank of England's monetary policy very loose. In May 2012, the Bank of England announced the suspension of the so-called. Quantitative easing (quantitative easing) was primarily due to inflation persistently above the objective. In April 2012, the CPI was 3.0%, whereas the RPI - 3.5%. Unemployment at the end of the first quarter of this year was 8.2%, which translates into 2.63 million unemployed (Harris, 1989).

After the first quarter of 2012, the British foreign trade balance was negative and amounted to about U.S. $ 26 billion (exports - U.S. $ 76 billion, import - 102 billion GBP). The biggest markets for British goods were the U.S., closely followed by Germany and the Netherlands in third. These three countries are also major exporters to the British market (in the following order: Germany, USA, and Netherlands). Poland ranks 24th in terms of British exports and 14th in terms of imports to the UK.

According to estimates published 21.03.2012 2012-13 Budget Act, the government's priorities are WB: continue fiscal consolidation ...