What is the most likely effect of a decrease in tariffs? What would increase the demand for a country’s currency on the foreign exchange market? The table shows a selection of economic data for a country. What is the current account balance of this country? A country changes to a policy of self-sufficiency in agriculture, instead of relying on world supplies. What is likely to happen in the country as a result? What is a quota in international trade? Many low-income countries rely on exports of raw materials such as coffee or iron ore to earn them foreign currency. What is a disadvantage of this? What is included as part of the current account of the balance of payments? Which balance improved between 2011 and 2012? What might be a disadvantage of Saudi Arabia's specialization in oil extraction and refining? Which protectionist measure would be most suitable for a government to use to support the growth in exports of an industry? There has been an appreciation of the value of a country’s currency against other currencies. What effects will this have on prices of imports of raw materials and prices of exports of manufactured goods? What is a disadvantage of increased specialization by a country? The table shows components of Japan’s current account balance in trillion Yen (¥) for 2011 and 2012. Which balance improved between 2011 and 2012? What are the effects on price and equilibrium quantity when an import tariff is imposed on a good? Which change will not increase a surplus on the current account of the balance of payments? An economy with a floating exchange rate experiences an increased deficit on the current account of the balance of payments. What will result from this? A government is faced with an unwanted deficit on the current account of its balance of payments. Which action is most likely to reduce the deficit? What is meant by a depreciation in the foreign exchange rate? The table shows information from a country’s current account of its balance of payments. What is the country’s current account balance? The diagram The diagram shows the value of a country’s exports and imports of goods over five years. Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? A country wishes to increase a current account surplus on the balance of payments. Which action would it take? The table shows a country’s exports and imports. What was the country’s balance of trade in goods and services? The diagram shows the value of a country’s exports and imports of goods over five years. Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? What would not be included in the current account of the balance of payments? What is most likely to discourage international specialization and trade for an economy? Many low-income countries rely on multinational companies (MNCs) to provide economic development. What is a disadvantage of this for the low- income country? Which method of trade protection would enable domestic firms to lower their prices and undercut the price of imported goods? How might a multinational company (MNC) directly benefit a host country? A country has a current account deficit on its balance of payments. Which measure is most likely to reduce the deficit? A country experienced a deficit on each of its trade in goods, primary income, and secondary income. Overall, it had a surplus on the current account of its balance of payments. What must this mean? What is a disadvantage of increasing international specialization? Which method of protection always reduces the supply of an imported good to zero? A US car dealer agrees an import price of US$25,000 for a Japanese car at the current rate of exchange. The US dollar then strengthens by 10% against the Japanese yen. What will be the new import price paid for the Japanese car? A country has a deficit on its current account of its balance of payments. What could increase the size of its deficit? A multinational company (MNC) wishes to invest in a low-income country to expand its palm oil production. What is most likely to make this investment possible? What is the most likely benefit for a low-income economy if it removes tariffs on imported goods and services? Economies have become increasingly linked through globalization. What would discourage this? What may result from a balance of payments trade surplus? What is a benefit of a multinational company (MNC) to the host country? Globalisation is the process by which domestic firms become involved in international markets. What encourages globalisation? What does a foreign exchange rate between Malaysia and the US measure? Why can specialization cause economic growth? The diagram shows China's trade with Brazil for two years. What happened to China's trade balance with Brazil between year 1 and year 2? Why do some governments limit the operations of multinational companies (MNCs) within their domestic economy? What is an immediate effect for a country of a fall in its foreign exchange rate? A country specializes in the production of steel, toys, and textiles. What is a disadvantage of specialization for the country’s workers? The diagram shows China’s trade with Brazil for two years. What happened to China’s trade balance with Brazil between year 1 and year 2? The US imposed tariffs on cars and motorcycles from Germany. What is the effect of these tariffs? What is a reason for trade protection? The US government introduces tariffs on steel imported from China. This increases the price of imported Chinese steel. Whose income would be likely to increase as a direct result? A government removed the quota on goods imported into the country. What is the most likely result of this? The governments of low-income countries often allow foreign multinational companies (MNCs) to mine minerals in their country. Which conflict between benefit and cost might this cause the low-income countries? What is the definition of foreign exchange rate?