👑International Trade   Essays

Analyse how a fall in a country’s foreign exchange rate could increase its inflation rate.

An economy adopts a freely floating exchange rate.
Explain how this economy’s exchange rate is likely to be affected when its inflation rate is much higher than inflation rates in its trading partners.

Discuss the advantages and disadvantages that result from a rise in an economy’s terms of trade and consider whether a rise is likely to be of overall benefit to an economy.

Explain two reasons why a government may want to reduce imports.

An economy is facing the shutdown of its steel making industry as a result of cheap imports.

Explain what is meant by ‘protectionism’ and describe two ways in which this steel industry could be protected. [8]

In Pakistan there is a limited choice of cars to buy. The country has a population of approximately 190 million but only about 120 000 cars a year are produced there. The firms producing cars in Pakistan are protected from foreign competition by a range of methods of trade protection.

Discuss whether demand for cars is likely to increase in the future.

Describe the four components of the current account of the balance of payments. Explain what might cause a deficit in this account. [8]

Discuss whether or not an economy would benefit from one of its industries opening branches in other countries.

Explain reasons why a country might want to restrict exports.

Discuss whether a government should use trade protection to reduce a current account deficit.

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

Discuss whether or not a reduction in imports is beneficial to an economy.