This mini-lesson walks you through the core of Edexcel — International Trade and the Global Economy: globalisation and its causes, international trade (exports and imports and why countries trade), exchange rates (SPICED/WPIDEC), the balance of payments (current account surplus and deficit), the role of the financial sector, and developing economies.
Work through each screen, answer the questions as you go (some are wordy, some are calculations like trade balances or currency conversions) and collect ⭐ stars. Press Start when you're ready.
Globalisation is the increasing integration and interdependence of the world's economies — countries becoming more connected through trade, investment, migration and technology.
Causes of globalisation: cheaper and faster transport & communications, trade liberalisation (fewer tariffs and trade barriers), and the growth of multinational companies.
International trade means buying and selling goods and services across borders. Get the direction of the money flow right:
Why trade? Countries specialise and use comparative advantage — they produce what they are relatively best at and trade for the rest. This gives lower prices and more choice for consumers.
An exchange rate is the price of one currency in terms of another — for example £1 = $1.25. When a currency's value changes, it changes the price of exports and imports:
Tip: to change pounds into another currency you multiply by the rate; to change a foreign price back into pounds you divide by the rate.
Tap an item, then tap the group it belongs to. (Remember: selling services abroad or inbound tourism = an export; a holiday abroad = an import.)
The balance of payments records a country's transactions with the rest of the world. The current account records trade in goods & services plus income flows.
A country exports £80bn and imports £110bn of goods.
Trade balance = 80 − 110 = −£30bn → a deficit.
The financial sector — banks and financial markets — helps an economy work and supports trade and growth in several ways:
Crucially, the financial sector channels funds from savers to borrowers and investors, turning savings into investment that helps businesses grow and trade internationally.
Link it up: without a working financial sector, firms could not easily borrow to invest, exchange currencies, or settle international payments — so trade and globalisation would slow.
Developing economies have a lower GDP per head than developed ones. Many rely heavily on primary exports (raw materials and agricultural goods), which can leave incomes unstable when world prices change.
Two sides: globalisation and trade can raise growth and living standards in developing economies, but can also bring development issues — reliance on one industry, environmental costs, or uneven gains.
Tap a description on the left, then its matching term on the right.
Globalisation: growing integration & interdependence of economies — caused by cheaper transport/communications, trade liberalisation and growth of MNCs
Exports vs imports: exports = sold abroad (money in) · imports = bought abroad (money out); countries trade due to specialisation & comparative advantage
Exchange rates: SPICED (strong pound → imports cheaper, exports dearer) · WPIDEC (weak pound → imports dearer, exports cheaper)
Balance of payments: trade balance = exports − imports; exports > imports = surplus, imports > exports = deficit
Financial sector: banks & markets provide loans, saving and payments, channelling funds from savers to investors
Developing economies: lower GDP per head, often rely on primary exports; grow through trade, FDI, aid & industrialisation
You've covered the core of Edexcel — International Trade and the Global Economy. Press Finish to see your score.
You've worked through International Trade and the Global Economy for Edexcel GCSE Economics. 🎉
Your stars: 0 / 0
Next: test yourself in the Evaluate stage Confidence Quiz, then lock it in with Verify.