Open University Mauritius OPEN UNIVERSITY of MAURITIUS Q2. Extract A The UK balance of trade in 2013 Component Em Export of goods 306 810 Import of goods 417 006 Export of services 204 465 Import of services 126 369 (Source: @ Office for National Statistics / Crown Copyright) Extract B Frozen yogurt firm takes on the world The Bristol based firm AngelBerry was founded in September 2011. The frozen yogurt retailer has only two UK stores, both in Bristol. There are currently six international franchised stores across the UAE, Mauritius and South Africa. Its franchising model has helped the firm expand into warmer climates where frozen products sell well all year round. The firm now has deals in place for 80 stores across the Gulf States by 2018, with further expansion planned in South Africa and the UAE. There are a number of other potential deals, including one with a cinema chain to roll out a kiosk version and further expansion into Europe and Asia. The firm's founders explained: "We both took a trip to the US to research every aspect of the frozen yogurt business. This trip gave us invaluable insight into how the US market 10 is growing and operating. It's essential to carry out thorough research before you start exporting. It will help prevent costly mistakes, boost your chances of choosing the right market and show you how to sell your products and services in that market." (Source: adapted from Frozen yogurt company takes on the world @ exportbritain.org.uk)Open University Mauritius OPEN UNIVERSITY of MAURITIUS Extract C Teesside docks largest cargo vessel in history In December 2015, the largest cargo vessel in history to ever pass under Teesside's Transporter Bridge set sail for overseas markets, demonstrating the continued strength of exports from the region. The cargo vessel, which is 172 metres long and 28 metres wide, docked at the deep-water quay of the firm AV Dawson before loading 21,000 tonnes of cargo. The cargo vessel was fully loaded within just six days. It then set off for export UT markets in Europe. The huge size of the ship allows exporters to benefit from economies of scale. The Managing Director (MD) at AV Dawson said: "The work that we've done over the last three years to dredge the river and develop our quayside is part of a multi-million pound plan. It is now enabling us to attract multinational customers, and to transport more 10 raw materials and finished products through Teesside and out to global markets. The investment programme included the purpose-built $3.4m deep-water quay, providing us with greater capacity to support larger and more economical vessels, effectively opening up Teesside to more export opportunities." The MD continued to explain that, "Nowhere is the phrase 'time is money' more apt than 15 when referring to shipping, so we employed two 100-tonne cranes simultaneously to speed up the loading process, reducing time in port and creating substantial savings for our customers, whilst enabling the vessel to be on its way as quickly as possible." (Source: adapted from Teesside exports largest cargo vessel in history, Jamie Hardesty @ bdaily.co.uk 2016) (a) Using the data from Extract A, calculate the balance of trade in goods for the UK [2] in 2013. You are advised to show your working. [2] (b) Explain how exporters may benefit from economies of scale. (Extract C, Lines 6-7) (c) Using data from Extract A, explain one reason why the UK economy can be described as developed. [3] (d) Analyse why the owners of AngelBerry advise that it is'essential to carry out thorough research before you start exporting'. [6] (e) Assess the merits of AngelBerry's decision to focus upon developing economies [7] for its growth. (f) Assess the likely effectiveness of using fiscal policy to reduce the deficit in the [10] UK balance of trade in goods. TOTAL: [30 MARKS]