Globalisation. International exchange. Types of trading blocs Examples of trading blocs Trade liberalisation. Types of trade protectionism. Reasons for trade protectionism Trade creation and trade diversion Sources of possible conflict between trading blocs The Common Agricultural Policy The World Trade Organisation (WTO). International competitiveness. The UK’s changing international competitive situation. Balance of payments Remedies for a balance of payments disequilibrium. Exchange rate systems. What Determines The Value Of An Exchange Rate? European Monetary Union. Inward foreign direct investment by MNCs. External shocks to the global economy. Public expenditure Taxation The working of fiscal, monetary and supply side policies. Unemployment Inflation Real output and the NAIRU (Phillips Curve).