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Removal of Import Quotas and its Impact on the Economy

Question

Analyse the impact on an economy of the removal of import quotas imposed by other countries.

Category:

International Trade and Exchange Rates

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Preview Answer

I. 🍃Introduction
- Brief explanation of the topic

II. Advantages of increasing exports
- Improving the current account of the balance of payments
- Extra revenue earned could be spent on imports, increasing variety/choice
- Allows country to specialise more, making better use of resources

III. Effects on the economy
- Rising total (aggregate) demand
- Could increase the demand for labour, reducing unemployment
- Causing economic growth

IV. Disadvantages of increasing exports
- Higher demand could cause inflation (demand-pull)
- Reducing purchasing power

V. 👉Conclusion
- Summary of the advantages and disadvantages of increasing exports
- Final thoughts on the topic.

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