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Topical›Economics 0455›International trade and globalisation›Globalisation, free trade and protection›Paper 1

Globalisation, free trade and protection — Paper 1 · IGCSE Economics 0455

6.2· 183 questions · 183 marks · 220 min · 2004–2025· Multiple choice

Every Cambridge IGCSE Economics Paper 1 question on globalisation, free trade and protection, laid out as 37 A4 pages with the mark scheme below. Nothing is left out. Free to read, no account.

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Questions37 pages

Question 1: The US trades with Uruguay. In 2002 the US approved a loan of US$ 1.5 billion to Uruguay to help boost Uruguay's economy. What would be the…Question 2: The Egyptian government reduced tariffs on imported Japanese trucks. What is most likely to benefit in Egypt from this reduction? A governm…Question 3: What best describes a multi-national company? A a company that is owned by the government B a company that has many shareholders C a compan…Question 4: Kimberly-Clark Corporation manufactures many products, including Kleenex paper handkerchiefs. It has operations in 43 countries. What is no…Question 5: Nigeria decides to introduce a policy that limits imports of Japanese cars to 15 % of the total market. What is this policy called? A an em…1 / 37
Question 6: What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tari…Question 7: The following is a headline from a newspaper. USA to impose tariffs of 40 % on imported steel What is the most likely result of these tarif…Question 8: The following report appeared in a newspaper. ‘The Chinese government is to allow the cigarette producer, BAT, to set up new factories in C…Question 9: What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more tradeQuestion 10: Many people in Zimbabwe want to buy foreign cars, which would be shipped by foreign companies. What happens if the Zimbabwe government remo…2 / 37
Question 11: A government decides to reduce the size of the quota on a good. What is likely to happen? A The balance of trade will worsen. B The good wi…Question 12: Which combination would offer increased trade protection for an economy? domestic subsidies tariffs A bigger higher B bigger lower C smalle…Question 13: What will result if Europe reduces trade barriers to increase imports of clothing and food from Asia and Africa? A greater choice for Europ…Question 14: In 2001 some countries, including India and Pakistan, criticised the European Union for continuing to protect European farmers with a subsi…Question 15: What directly sets a fixed limit on the quantity of goods which can be imported? A administrative regulations B foreign exchange controls C…3 / 37
Question 16: The introduction of a tariff on imported goods is likely to A ensure that the domestic industry becomes more efficient. B increase the dema…Question 17: A company is described as a multinational if it A employs workers of several nationalities. B exports goods to several countries. C has pro…Question 18: Some countries protect their economies through barriers to free trade. What would be the result in such countries of this protection? A Com…Question 19: A company producing coffee in Europe has operations in Brazil and Kenya. What is a reason why a company might decide to have operations in …Question 20: What lowers the cost of producing goods for export? A a quota B a subsidy C a tariff D foreign exchange control4 / 37
Question 21: A major market for bananas from Latin America is the European Union (EU). In 2006, the EU imposed a 35 % tariff on banana imports from Lati…Question 22: A government decreased the tax on all goods imported into the country. What is the most likely result of this? A a decrease in domestic pro…Question 23: What would be least likely to limit international trade? A border restrictions on movement B common regulations in different countries C co…Question 24: What distinguishes a multi-national company from other companies? A It has agents in other countries. B It produces in other countries. C I…Question 25: Drinks producers in India are resisting plans to remove tariffs on imported drinks. They claim that a reduction in tariffs would destroy th…5 / 37
Question 26: Which policy would best enable a government to encourage greater specialisation in the use of its country’s resources? A encouraging divers…Question 27: In September 2008, the Chinese government increased the sales tax on cars with large engines whilst it reduced the sales tax on cars with s…Question 28: One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price…Question 29: One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price…6 / 37
Question 30: In September 2008, the Chinese government increased the sales tax on cars with large engines whilst it reduced the sales tax on cars with s…Question 31: One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price…Question 32: In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to incre…Question 33: A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of …Question 34: In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to incre…7 / 37
Question 35: A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of …Question 36: In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to incre…Question 37: A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of …Question 38: After more than 70 years of production, a German car manufacturer, Volkswagen, has decided to locate the production of its biggest selling …Question 39: What is an advantage to a country of free trade? A greater international diversification of production B greater range of domestically prod…8 / 37
Question 40: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 41: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 42: In some Asian countries the cost of labour is lower than in developed countries. As a result they manufacture and export clothes to Europe,…Question 43: In some Asian countries the cost of labour is lower than in developed countries. As a result they manufacture and export clothes to Europe,…9 / 37
Question 44: Russia exports wheat. In 2010, because of a bad harvest, the Russian Government prevented the export of wheat to keep enough supplies for d…Question 45: China has become South Africa’s largest trading partner. In 2009, 16 % of South Africa’s imports came from China while 11 % of its exports …Question 46: A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do…Question 47: In the first six months of 2011 a construction company, Morgan Sindall, saw its profits fall. Part of the reason was the increased competit…Question 48: What is thought to be a benefit of global free trade? A It increases the opportunity for domestic producers to specialise. B It increases t…10 / 37
Question 49: A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on …Question 50: The multinational Indian Tata Group, which has companies in chemicals, consumer goods, engineering and communications, has been buying fore…Question 51: In the first six months of 2011 a construction company, Morgan Sindall, saw its profits fall. Part of the reason was the increased competit…Question 52: What is thought to be a benefit of global free trade? A It increases the opportunity for domestic producers to specialise. B It increases t…Question 53: Which of the following could not be a reason for imposing tariffs on imported goods? A to encourage self sufficiency B to lower the general…11 / 37
Question 54: A developing country’s two major sources of income from international trade are fishing and tourism. If the country’s exchange rate depreci…Question 55: Which of the following could not be a reason for imposing tariffs on imported goods? A to encourage self sufficiency B to lower the general…Question 56: How does a tariff differ from a quota? A A tariff is on exports, a quota is on imports. B A tariff is on the quantity of an import, a quota…Question 57: The Sri Lankan government decides to offer financial support to local firms. Of what is this an example? A a quota B a subsidy C a tariff D…Question 58: The Sri Lankan government decides to offer financial support to local firms. Of what is this an example? A a quota B a subsidy C a tariff D…Question 59: Which change will increase the demand for imports? A Consumer credit becomes more expensive. B Income tax rates increase. C The exchange ra…12 / 37
Question 60: Which change will increase the demand for imports? A Consumer credit becomes more expensive. B Income tax rates increase. C The exchange ra…Question 61: Which change will increase the quantity of a country’s exports? A Foreign governments raise tariff rates. B The country’s exchange rate dep…Question 62: In September 2011 the Brazilian Government increased its tariff on imported Chinese cars. Which change might have increased the number of c…Question 63: Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept…Question 64: Skin creams preventing sunburn made in the European Union (EU) are more effective than those made in the United States (US). US tourists st…13 / 37
Question 65: Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept…Question 66: Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept…Question 67: The diagram shows the market for imported cars. S2 S1 price D O quantity of cars Which government action could be shown by the change in th…Question 68: A country imposes tariffs and quotas on imported goods. What will citizens of that country experience? A higher prices B higher welfare C h…14 / 37
Question 69: Drinks producers in India are resisting plans to remove tariffs on imported drinks. They claim that a reduction in tariffs would destroy th…Question 70: Who is most likely to benefit if India bans all steel imports? A buyers of steel in India B foreign steel producers C Indian firms buying s…Question 71: What is certain to encourage a higher level of international trade? A conservation of resources and unstable exchange rates B exploitation …Question 72: A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on …Question 73: A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on …15 / 37
Question 74: A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on …Question 75: What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotasQuestion 76: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 77: What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotasQuestion 78: A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do…Question 79: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…16 / 37
Question 80: Which policy is a form of protectionism? A a tax on emissions B a tax on imports C a tax on income D a tax on propertyQuestion 81: When does free trade occur? A when goods are exported with government subsidies B when goods are given as part of an aid programme C when g…Question 82: Which characteristic do developed and developing economies have in common? A participation in international trade B high birth rates and hi…Question 83: What is necessarily involved in international free trade? A the absence of transport costs B the gift of foreign aid from charities C the s…Question 84: Which government policy is most likely to increase the volume of exports? A devaluation B embargoes C quotas D tariffsQuestion 85: What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tari…17 / 37
Question 86: In 2015, Russia banned the imports of food, such as milk, from the European Union (EU). Which outcomes are most likely to happen as a resul…Question 87: Which government policy is most likely to increase the volume of exports? A devaluation B embargoes C quotas D tariffsQuestion 88: Which method would both reduce imports and encourage exports? A embargoes on dangerous products B quotas on agricultural produce C subsidie…Question 89: In 2015, China was the world’s biggest importer of oil. In August 2015, China devalued its currency. What is likely to have happened? A The…Question 90: An economy has a deficit on its balance of trade in manufactured goods. Which government policy will reduce this deficit? A a decrease in s…18 / 37
Question 91: What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more tradeQuestion 92: What distinguishes a multinational company from other types of company? A It exports its products. B It imports its raw materials. C It pro…Question 93: What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more tradeQuestion 94: It was reported in 2011 that the United States (US) needed to achieve a lower current account deficit. What would help this in the short ru…Question 95: What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more tradeQuestion 96: What policy would encourage greater international specialisation? A the promotion of industrial diversification B the protection of new bus…19 / 37
Question 97: A country has decided that it wants to increase free trade with its trading partners. Which measure would help it achieve this objective? A…Question 98: A country wishes to follow a policy of trade protection. Which action would it take? A increase the level of import quotas B reduce import …Question 99: What would have the most severe restriction on the volume of international trade in steel? A an embargo B a licence system C a quota D a ta…Question 100: What is a valid economic argument in favour of trade protection? A It allows greater consumer choice. B It encourages trade liberalisation.…Question 101: Which government policy is most likely to improve a country’s balance of trade? A a decrease in direct taxation B a decrease in the exchang…20 / 37
Question 102: The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs…Question 103: The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs…Question 104: A government imposes a limit of 2 million on the number of smartphones imported into the country. Which term is given to this limitation? A…21 / 37
Question 105: The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs…Question 106: Which measure would a government take to reduce a current account deficit? A increase tariffs B increase value added tax C reduce income ta…Question 107: A country imposes tariffs and quotas on imported goods. What will citizens of that country experience? A higher prices B higher unemploymen…Question 108: Skin creams preventing sunburn made in the European Union (EU) are more effective than those made in the United States (US). US tourists st…22 / 37
Question 109: The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become ch…Question 110: In 2013, the European Union (EU) levied a 48% tariff on low-priced Chinese solar panels because the low price was the result of subsidies f…Question 111: Why might a government decide to subsidise a high-cost steel industry? A if cheaper imports of steel are improving the balance of payments …Question 112: The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become ch…Question 113: A large amount of the agricultural products in a country were damaged by floods. What is likely to have happened to the price of agricultur…23 / 37
Question 114: The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become ch…Question 115: A large amount of the agricultural products in a country were damaged by floods. What is likely to have happened to the price of agricultur…Question 116: Protectionist policies reduce the level of global economic growth. What is a possible reason for this? A Incomes earned from trading declin…Question 117: What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese …Question 118: What is a disadvantage of trade protection of manufactured goods? A It can lead to retaliation from trading partners. B It encourages infan…24 / 37
Question 119: What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese …Question 120: A newspaper headline stated ‘Free trade helps the world’s poorest’. Why might this be correct? A Employment will be focused in hi-tech indu…Question 121: What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese …Question 122: What is the most likely effect of a decrease in tariffs? A increased inflation rates B increased consumer choices C increased government re…Question 123: What is a quota in international trade? A a government grant to encourage production B an administrative and technical barrier C a limit on…Question 124: 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…25 / 37
Question 125: Which protectionist measure would be most suitable for a government to use to support the growth in exports of an industry? A embargo B quo…Question 126: What are the effects on price and equilibrium quantity of the imposition of an import tariff on a good? price equilibrium quantity A decrea…Question 127: A low-income country experiences extreme poverty in its rural areas. What is a possible cause of this? A development of better irrigation t…Question 128: 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…Question 129: A country wishes to increase a current account surplus on the balance of payments. Which action would it take? A abolish an import quota B …26 / 37
Question 130: What is most likely to discourage international specialisation and trade for an economy? A decreasing labour supply B decreasing transport …Question 131: Many low-income countries rely on multinational companies (MNCs) to provide economic development. What is a disadvantage of this for the lo…Question 132: Which method of trade protection would enable domestic firms to lower their prices and undercut the price of imported goods? A a subsidy B …Question 133: How might a multinational company (MNC) directly benefit a host country? A It creates local employment. B It depletes local natural resourc…Question 134: Which method of protection always reduces the supply of an imported good to zero? A embargo B quota C subsidy D tariffQuestion 135: What is the most likely benefit for a low-income economy if it removes tariffs on imported goods and services? A more choice for domestic c…27 / 37
Question 136: Economies have become increasingly linked through globalisation. What would discourage this? A creation of a single world market B direct f…Question 137: What is a benefit of a multinational company (MNC) to the host country? A A MNC may improve the reputation of its home country as a high-qu…Question 138: Globalisation is the process by which domestic firms become involved in international markets. What encourages globalisation? A controls on…Question 139: Why do some governments limit the operations of multinational companies (MNCs) within their domestic economy? A MNCs contribute to technolo…Question 140: The US imposed tariffs on cars and motorcycles from Germany. What is the effect of these tariffs? A decrease in inflation in the US B decre…Question 141: What is a reason for trade protection? A to reduce a deficit on the current account of the balance of payments B to reduce a surplus on the…28 / 37
Question 142: The US government introduces tariffs on steel imported from China. This increases the price of imported Chinese steel. Whose income would b…Question 143: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 144: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 145: The governments of low-income countries often allow foreign multinational companies (MNCs) to mine minerals in their country. Which conflic…Question 146: Which action is not performed by a government as part of its international role? A building offshore wind farms B imposing tariffs on impor…29 / 37
Question 147: A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domes…Question 148: The governments of low-income countries often allow foreign multinational companies (MNCs) to mine minerals in their country. Which conflic…Question 149: Which row shows the potential benefits of free trade to consumers, producers and the economy? consumers producers economy A higher income l…Question 150: What is a restriction on the quantity of imports called? A dumping B quota C subsidy D tariffQuestion 151: Which combination of factors would attract a multinational company (MNC) producing smartphones to operate in a low-income country? A high e…30 / 37
Question 152: Country X produces cars and also imports cars. Which group is least likely to benefit from the introduction of an import tariff on cars? A …Question 153: What is a quota in international trade? A a government grant to encourage production B a limit on the quantity of imports C a tax on import…Question 154: It is cheaper for developed economies to buy some cereals from developing economies than to produce them domestically. What might reduce in…Question 155: A country imposes a quota on imported cars. What is the most likely outcome of this action? A a decrease in the domestic output of cars B a…Question 156: Which policy measure is most likely to reduce the current account deficit of the balance of payments of an economy? A decrease the level of…31 / 37
Question 157: Country X exports steel to country Y at a price below its cost of production. This has led to a fall in demand for steel produced in countr…Question 158: Country X has a persistent deficit on the current account of the balance payments. Which policy measure is most likely to improve this situ…Question 159: What is certain to encourage a higher level of international trade? A conservation of resources and unstable exchange rates B exploitation …Question 160: The import of a product from another country has been banned. Which term describes this method of protection? A embargo B exchange control …Question 161: A country imposes a tariff on an imported product. What is the effect of this change? the quantity of the the price of the product imported…32 / 37
Question 162: Which benefit do multinational companies (MNCs) bring to their home country? A flow of profits B higher wages C increased employment D more…Question 163: Country X believes that country Y is selling steel at prices below the average cost of production. So, country X imposes a higher tariff on…Question 164: Country X established free trade agreements with other nations. What would be the intended benefit of such agreements to country X? A incre…Question 165: What is a likely effect of imposing a tariff? A It encourages home industries to be more efficient. B It increases the demand for home-prod…33 / 37
Question 166: The diagram shows the market for an imported good with equilibrium at point X. The country imposes a tariff on this good. Is the new equili…Question 167: What are the effects on price and equilibrium quantity of the imposition of an import tariff on a good? equilibrium price quantity A decrea…Question 168: A multinational company (MNC) opens up a new factory in a host country. What is a possible cost of this new factory to the host country? A …Question 169: A government wishes to stop the dumping of a specific imported good at a very low price. Which method of protection would be most effective…34 / 37
Question 170: What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotasQuestion 171: A country wants to limit the number of imported cars to a maximum of 100 000 in a year. Which measure is most likely to achieve this object…Question 172: The US puts a 25% tariff on Chinese steel to protect jobs in the US steel industry. Under which condition would this policy be most effecti…Question 173: What might an economist consider to be meant by the term dumping? A foreign firms exporting waste products B foreign firms producing goods …Question 174: Mining by multinational companies (MNCs) has both costs and benefits for the host nation. Which activity is least likely to offer a benefit…35 / 37
Question 175: Country Y decides to specialise in the domestic mining of rare metals required in the production of electric-car batteries. What is a likel…Question 176: The UK government increases the price of steel imported from Germany by increasing an existing tariff. Assuming steel has price-inelastic d…Question 177: Which government action would not be included as part of a supply-side policy? A increasing the privatisation of industries B lowering nati…Question 178: Which government policy would encourage greater international trade? A an increase in the level of domestic regulation B an increase in the…Question 179: A government imposes tariffs on imported goods. What is not a likely reason for this? A to boost domestic output B to influence the country…36 / 37
Question 180: An economy raises its tariffs on imported goods. What is the most likely result? A a fall in the rate of inflation B an increase in consume…Question 181: A government wishes to reduce the deficit on the current account of its balance of payments. Which policy should it adopt? A increase subsi…Question 182: What is not a likely benefit of free trade? A consumers should experience lower prices B consumers should have a greater choice of goods C …Question 183: What is a likely government policy to reduce a deficit on the current account of the balance of payments? A increasing the value of the for…37 / 37

Mark scheme183 answers

Answers below. Sit the paper first if you are practising.

Pastlit

Economics 0455 · Globalisation, free trade and protection — Paper 1

IGCSE · topical answer key — answer key (teacher use)

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Answer

Marks

1A1
2C1
3D1
4D1
5B1
6A1
7C1
8A1
9B1
10D1
11D1
12A1
13A1
14D1
15C1
16B1
17C1
18A1
19A1
20B1
21D1
22A1
23B1
24B1
25B1
26C1
27A1
28C1
29C1
30A1
31C1
32D1
33B1
34D1
35B1
36D1
37B1
38D1
39D1
40A1
41A1
42B1
43B1
44D1
45C1
46D1
47B1
48A1
49C1
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Economics 0455 · Globalisation, free trade and protection — Paper 1

IGCSE · topical answer key — answer key (teacher use)

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Marks

50D1
51B1
52A1
53B1
54C1
55B1
56C1
57B1
58B1
59C1
60C1
61B1
62A1
63D1
64B1
65D1
66D1
67D1
68A1
69B1
70D1
71D1
72C1
73C1
74C1
75—1
76—1
77C1
78D1
79A1
80B1
81D1
82A1
83D1
84A1
85A1
86D1
87A1
88C1
89D1
90D1
91B1
92C1
93B1
94A1
95B1
96C1
97A1
98D1
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Economics 0455 · Globalisation, free trade and protection — Paper 1

IGCSE · topical answer key — answer key (teacher use)

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Marks

99A1
100C1
101B1
102C1
103C1
104C1
105C1
106A1
107A1
108B1
109D1
110A1
111D1
112D1
113D1
114D1
115D1
116A1
117C1
118A1
119C1
120D1
121C1
122—1
123C1
124D1
125C1
126C1
127C1
128C1
129B1
130D1
131A1
132A1
133A1
134A1
135A1
136D1
137B1
138D1
139C1
140B1
141A1
142C1
143A1
144A1
145B1
146A1
147A1
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Pastlit

Economics 0455 · Globalisation, free trade and protection — Paper 1

IGCSE · topical answer key — answer key (teacher use)

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Answer

Marks

148B1
149D1
150B1
151A1
152A1
153B1
154B1
155D1
156B1
157A1
158A1
159D1
160A1
161C1
162A1
163B1
164C1
165B1
166B1
167C1
168B1
169A1
170C1
171B1
172A1
173D1
174C1
175B1
176B1
177C1
178C1
179D1
180C1
181A1
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Another paper, or another topic

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All of International trade and globalisation →

Questions as text

Q1 · The US trades with Uruguay 0455/11 Oct/Nov 2004

26 The US trades with Uruguay. In 2002 the US approved a loan of US$ 1.5 billion to Uruguay to help boost Uruguay's economy. What would be the most likely effect of this loan? A It would encourage Uruguay to import from the US. B It would make Uruguay less competitive. C It would result in imported inflation. D It would stop US citizens investing in Uruguay.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2004

Q2 · The Egyptian government reduced tariffs on imported Japanese trucks 0455/11 Oct/Nov 2004

39 The Egyptian government reduced tariffs on imported Japanese trucks. What is most likely to benefit in Egypt from this reduction? A government revenue B the balance of payments C truck operators D truck producers

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2004

Q3 · What best describes a multi-national company? 0455/11 May/June 2006

6 What best describes a multi-national company? A a company that is owned by the government B a company that has many shareholders C a company that trades internationally D a company that produces in more than one country

1 marks

Answer: D

This question in 0455/11 May/June 2006

Q4 · Kimberly-Clark Corporation manufactures many products, including Kleenex paper… 0455/11 May/June 2006

7 Kimberly-Clark Corporation manufactures many products, including Kleenex paper handkerchiefs. It has operations in 43 countries. What is not a reason why a company might decide to have operations in more than one country? A availability of raw materials B local markets can be served C transport is a high proportion of costs D trade union pressure

1 marks

Answer: D

This question in 0455/11 May/June 2006

Q5 · Nigeria decides to introduce a policy that limits imports of Japanese cars to 15 % of the… 0455/11 May/June 2006

37 Nigeria decides to introduce a policy that limits imports of Japanese cars to 15 % of the total market. What is this policy called? A an embargo B a quota C a subsidy D a tariff

1 marks

Answer: B

This question in 0455/11 May/June 2006

Q6 · What might encourage international specialisation between countries? 0455/11 May/June 2006

39 What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tariffs

1 marks

Answer: A

This question in 0455/11 May/June 2006

Q7 · The following is a headline from a newspaper 0455/11 May/June 2006

40 The following is a headline from a newspaper. USA to impose tariffs of 40 % on imported steel What is the most likely result of these tariffs? A a fall in the cost of producing cars in the USA B a fall in the exports of steel from the USA C a rise in employment in the USA’s steel industry D a trade deficit for the USA

1 marks

Answer: C

This question in 0455/11 May/June 2006

Q8 · The following report appeared in a newspaper 0455/11 Oct/Nov 2006

5 The following report appeared in a newspaper. ‘The Chinese government is to allow the cigarette producer, BAT, to set up new factories in China.’ What type of organisation is BAT likely to be? A a multi-national company B a partnership C a private company D a public corporation

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2006

Q9 · What is a benefit of tariffs? 0455/11 Oct/Nov 2006

37 What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more trade

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2006

Q10 · Many people in Zimbabwe want to buy foreign cars, which would be shipped by foreign… 0455/11 Oct/Nov 2006

38 Many people in Zimbabwe want to buy foreign cars, which would be shipped by foreign companies. What happens if the Zimbabwe government removes the quota on the import of motor cars? balance on trade in balance on trade in goods services A improves no change B improves worsens C worsens no change D worsens worsens

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2006

Q11 · A government decides to reduce the size of the quota on a good 0455/11 May/June 2007

36 A government decides to reduce the size of the quota on a good. What is likely to happen? A The balance of trade will worsen. B The good will become cheaper. C The government’s revenue will decline. D There will be less of the good imported.

1 marks

Answer: D

This question in 0455/11 May/June 2007

Q12 · Which combination would offer increased trade protection for an economy? 0455/11 May/June 2007

37 Which combination would offer increased trade protection for an economy? domestic subsidies tariffs A bigger higher B bigger lower C smaller higher D smaller lower

1 marks

Answer: A

This question in 0455/11 May/June 2007

Q13 · What will result if Europe reduces trade barriers to increase imports of clothing and… 0455/11 May/June 2007

40 What will result if Europe reduces trade barriers to increase imports of clothing and food from Asia and Africa? A greater choice for European consumers B increased income for European producers C lower unemployment in the European clothing industry D slower economic growth in Asia and Africa

1 marks

Answer: A

This question in 0455/11 May/June 2007

Q14 · In 2001 some countries, including India and Pakistan, criticised the European Union for… 0455/11 Oct/Nov 2007

7 In 2001 some countries, including India and Pakistan, criticised the European Union for continuing to protect European farmers with a subsidy while expecting poorer African countries not to restrict trade. What are not involved in this situation? A developing and developed economies B free trade and protection C market prices and official intervention D multi-nationals and public corporations

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2007

Q15 · What directly sets a fixed limit on the quantity of goods which can be imported? 0455/11 Oct/Nov 2007

37 What directly sets a fixed limit on the quantity of goods which can be imported? A administrative regulations B foreign exchange controls C quotas D tariffs

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2007

Q16 · The introduction of a tariff on imported goods is likely to A ensure that the domestic… 0455/11 Oct/Nov 2007

40 The introduction of a tariff on imported goods is likely to A ensure that the domestic industry becomes more efficient. B increase the demand for domestically produced goods. C reduce the price of domestically produced goods. D reduce the price of imported goods into a country.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2007

Q17 · A company is described as a multinational if it A employs workers of several nationalities 0455/11 May/June 2008

9 A company is described as a multinational if it A employs workers of several nationalities. B exports goods to several countries. C has production units in several countries. D has shareholders from several countries.

1 marks

Answer: C

This question in 0455/11 May/June 2008

Q18 · Some countries protect their economies through barriers to free trade 0455/11 May/June 2008

37 Some countries protect their economies through barriers to free trade. What would be the result in such countries of this protection? A Competition will be reduced. B Consumer choice will increase. C Prices will fall. D Unemployment will rise.

1 marks

Answer: A

This question in 0455/11 May/June 2008

Q19 · A company producing coffee in Europe has operations in Brazil and Kenya 0455/11 Oct/Nov 2008

6 A company producing coffee in Europe has operations in Brazil and Kenya. What is a reason why a company might decide to have operations in more than one country? A availability of cheaper raw materials B easier central control of operations C greater risk of supply disruption D increased transport costs

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2008

Q20 · What lowers the cost of producing goods for export? 0455/11 Oct/Nov 2008

37 What lowers the cost of producing goods for export? A a quota B a subsidy C a tariff D foreign exchange control

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2008

Q21 · A major market for bananas from Latin America is the European Union (EU) 0455/11 Oct/Nov 2008

39 A major market for bananas from Latin America is the European Union (EU). In 2006, the EU imposed a 35 % tariff on banana imports from Latin America but not on substitutes from other regions. What impact is the tax likely to have had on the price of Latin American bananas in the EU and the revenue of Latin American producers? EU price of Latin revenue of Latin American bananas American producers A decrease decrease B decrease increase C increase increase D increase decrease

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2008

Q22 · A government decreased the tax on all goods imported into the country 0455/11 May/June 2009

19 A government decreased the tax on all goods imported into the country. What is the most likely result of this? A a decrease in domestic production B an increase in economic growth C an increase in exports D an improvement in the balance of trade in goods

1 marks

Answer: A

This question in 0455/11 May/June 2009

Q23 · What would be least likely to limit international trade? 0455/11 May/June 2009

30 What would be least likely to limit international trade? A border restrictions on movement B common regulations in different countries C complicated customs procedures D poor information on international markets

1 marks

Answer: B

This question in 0455/11 May/June 2009

Q24 · What distinguishes a multi-national company from other companies? 0455/11 Oct/Nov 2009

13 What distinguishes a multi-national company from other companies? A It has agents in other countries. B It produces in other countries. C It takes part in international trade. D It uses raw materials and components from more than one country.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2009

Q25 · Drinks producers in India are resisting plans to remove tariffs on imported drinks 0455/11 Oct/Nov 2009

30 Drinks producers in India are resisting plans to remove tariffs on imported drinks. They claim that a reduction in tariffs would destroy the emerging drinks industry with large-scale imports of cheap drinks. Which argument for protectionism are they putting forward? A the declining industry argument B the infant industry argument C the strategic industry argument D the sunset industry argument

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2009

Q26 · Which policy would best enable a government to encourage greater specialisation in the… 0455/12 May/June 2010

28 Which policy would best enable a government to encourage greater specialisation in the use of its country’s resources? A encouraging diversification in industry B protecting small businesses C reducing tariffs on imports into its country D subsidising job creation in rural areas

1 marks

Answer: C

This question in 0455/12 May/June 2010

Q27 · In September 2008, the Chinese government increased the sales tax on cars with large… 0455/11 Oct/Nov 2010

22 In September 2008, the Chinese government increased the sales tax on cars with large engines whilst it reduced the sales tax on cars with small engines. Most cars in China with large engines are imported whilst most cars with small engines are home produced. Which effects would the changes in sales tax be expected to have on China’s trade surplus and the demand for home produced cars? demand for home trade surplus produced cars A increase increase B increase reduce C reduce increase D reduce reduce

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2010

Q28 · One argument for protectionism is to prevent dumping 0455/11 Oct/Nov 2010

29 One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price advantage B countries providing poor working conditions for their employees to keep costs low C countries selling products abroad at less than the cost of production D countries selling products abroad that do not meet health and safety standards

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2010

Q29 · One argument for protectionism is to prevent dumping 0455/12 Oct/Nov 2010

30 One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price advantage B countries providing poor working conditions for their employees to keep costs low C countries selling products abroad at less than the cost of production D countries selling products abroad that do not meet health and safety standards

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2010

Q30 · In September 2008, the Chinese government increased the sales tax on cars with large… 0455/13 Oct/Nov 2010

20 In September 2008, the Chinese government increased the sales tax on cars with large engines whilst it reduced the sales tax on cars with small engines. Most cars in China with large engines are imported whilst most cars with small engines are home produced. Which effects would the changes in sales tax be expected to have on China’s trade surplus and the demand for home produced cars? demand for home trade surplus produced cars A increase increase B increase reduce C reduce increase D reduce reduce

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2010

Q31 · One argument for protectionism is to prevent dumping 0455/13 Oct/Nov 2010

29 One argument for protectionism is to prevent dumping. What is meant by dumping? A countries paying low wages to their workers to gain price advantage B countries providing poor working conditions for their employees to keep costs low C countries selling products abroad at less than the cost of production D countries selling products abroad that do not meet health and safety standards

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2010

Q32 · In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans 0455/11 May/June 2011

22 In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to increase agricultural output B to increase exports C to reduce a budget surplus D to reduce the rise in domestic food prices

1 marks

Answer: D

This question in 0455/11 May/June 2011

Q33 · A government may use customs barriers to restrict free trade 0455/11 May/June 2011

30 A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of strategic goods B to improve the balance of trade C to increase a balance of payments deficit D to make imports cheaper

1 marks

Answer: B

This question in 0455/11 May/June 2011

Q34 · In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans 0455/12 May/June 2011

21 In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to increase agricultural output B to increase exports C to reduce a budget surplus D to reduce the rise in domestic food prices

1 marks

Answer: D

This question in 0455/12 May/June 2011

Q35 · A government may use customs barriers to restrict free trade 0455/12 May/June 2011

29 A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of strategic goods B to improve the balance of trade C to increase a balance of payments deficit D to make imports cheaper

1 marks

Answer: B

This question in 0455/12 May/June 2011

Q36 · In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans 0455/13 May/June 2011

21 In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans. What was the most likely aim of this tax? A to increase agricultural output B to increase exports C to reduce a budget surplus D to reduce the rise in domestic food prices

1 marks

Answer: D

This question in 0455/13 May/June 2011

Q37 · A government may use customs barriers to restrict free trade 0455/13 May/June 2011

29 A government may use customs barriers to restrict free trade. What is an economic reason for doing this? A to discourage the production of strategic goods B to improve the balance of trade C to increase a balance of payments deficit D to make imports cheaper

1 marks

Answer: B

This question in 0455/13 May/June 2011

Q38 · After more than 70 years of production, a German car manufacturer, Volkswagen, has… 0455/11 May/June 2012

26 After more than 70 years of production, a German car manufacturer, Volkswagen, has decided to locate the production of its biggest selling car in developing countries, rather than Germany. What is the main advantage of this policy? A to access new management techniques B to make use of better infrastructure C to sell the car only to customers in developing countries D to train and employ labour at a lower cost

1 marks

Answer: D

This question in 0455/11 May/June 2012

Q39 · What is an advantage to a country of free trade? 0455/11 May/June 2012

29 What is an advantage to a country of free trade? A greater international diversification of production B greater range of domestically produced goods C greater reliance on other countries D greater specialisation in the use of resources

1 marks

Answer: D

This question in 0455/11 May/June 2012

Q40 · A government removed the quota on goods imported into the country 0455/12 May/June 2012

29 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/12 May/June 2012

Q41 · A government removed the quota on goods imported into the country 0455/13 May/June 2012

29 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/13 May/June 2012

Q42 · In some Asian countries the cost of labour is lower than in developed countries 0455/11 Oct/Nov 2012

24 In some Asian countries the cost of labour is lower than in developed countries. As a result they manufacture and export clothes to Europe, where the demand for clothes is high. The quality of these clothes, however, is not as good as some of the clothes produced in Europe. What is likely to happen in the Asian countries and to the total expenditure on clothes in Europe? change in impact in Asian countries expenditure in Europe A capital account will improve increase B current account will improve uncertain C exchange rate will fall uncertain D terms of trade will fall decrease

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2012

Q43 · In some Asian countries the cost of labour is lower than in developed countries 0455/12 Oct/Nov 2012

30 In some Asian countries the cost of labour is lower than in developed countries. As a result they manufacture and export clothes to Europe, where the demand for clothes is high. The quality of these clothes, however, is not as good as some of the clothes produced in Europe. What is likely to happen in the Asian countries and to the total expenditure on clothes in Europe? change in impact in Asian countries expenditure in Europe A capital account will improve increase B current account will improve uncertain C exchange rate will fall uncertain D terms of trade will fall decrease

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2012

Question 44 0455/13 Oct/Nov 2012

21 Russia exports wheat. In 2010, because of a bad harvest, the Russian Government prevented the export of wheat to keep enough supplies for domestic use. What happened as a result of the government’s action? A Prices were fixed by the wheat producers. B The amount produced was determined by the government. C The price of wheat abroad fell. D There was a redistribution of domestic production.

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2012

Q45 · China has become South Africa’s largest trading partner 0455/13 Oct/Nov 2012

25 China has become South Africa’s largest trading partner. In 2009, 16 % of South Africa’s imports came from China while 11 % of its exports went to China. China is also investing in infrastructure designed to help increase production in South Africa. What can be concluded from this information? A China is investing more in South Africa than in other countries. B China’s GDP will grow more slowly than South Africa’s GDP. C GDP in South Africa is likely to rise. D South Africa imported a greater number of goods and services from China than it exported to China.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2012

Q46 · A Japanese car manufacturer decided to produce its cars in a factory in Europe 0455/13 Oct/Nov 2012

29 A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do this? A cheaper wage costs in Europe B the availability of raw materials C to gain external economies from skilled labour in Europe D to increase Japanese self-sufficiency

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2012

Q47 · In the first six months of 2011 a construction company, Morgan Sindall, saw its profits… 0455/11 May/June 2013

22 In the first six months of 2011 a construction company, Morgan Sindall, saw its profits fall. Part of the reason was the increased competition from foreign competitors. Which government policy is most likely to help such a company? A increasing benefits to the unemployed B increasing tax-free allowances on new building projects C putting a quota on imported raw materials used by the company D raising interest rates

1 marks

Answer: B

This question in 0455/11 May/June 2013

Q48 · What is thought to be a benefit of global free trade? 0455/11 May/June 2013

29 What is thought to be a benefit of global free trade? A It increases the opportunity for domestic producers to specialise. B It increases the protection for domestic producers. C It reduces a country’s reliance on other countries. D It reduces the transport costs involved in trading.

1 marks

Answer: A

This question in 0455/11 May/June 2013

Q49 · A country says that it wishes to increase its trade protection policies 0455/12 May/June 2013

29 A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on external costs B eliminating waste in the use of resources and the encouragement of multinational companies C increased self sufficiency and barriers to trade D price controls and increased regulations on domestic monopoly industries

1 marks

Answer: C

This question in 0455/12 May/June 2013

Q50 · The multinational Indian Tata Group, which has companies in chemicals, consumer goods… 0455/13 May/June 2013

4 The multinational Indian Tata Group, which has companies in chemicals, consumer goods, engineering and communications, has been buying foreign companies. What does this action most likely suggest about the company? A It intends to achieve a domestic monopoly position. B It intends to increase its level of specialisation. C It intends to reduce fixed costs. D It intends to spread risks by diversification.

1 marks

Answer: D

This question in 0455/13 May/June 2013

Q51 · In the first six months of 2011 a construction company, Morgan Sindall, saw its profits… 0455/13 May/June 2013

8 In the first six months of 2011 a construction company, Morgan Sindall, saw its profits fall. Part of the reason was the increased competition from foreign competitors. Which government policy is most likely to help such a company? A increasing benefits to the unemployed B increasing tax-free allowances on new building projects C putting a quota on imported raw materials used by the company D raising interest rates

1 marks

Answer: B

This question in 0455/13 May/June 2013

Q52 · What is thought to be a benefit of global free trade? 0455/13 May/June 2013

24 What is thought to be a benefit of global free trade? A It increases the opportunity for domestic producers to specialise. B It increases the protection for domestic producers. C It reduces a country’s reliance on other countries. D It reduces the transport costs involved in trading.

1 marks

Answer: A

This question in 0455/13 May/June 2013

Q53 · Which of the following could not be a reason for imposing tariffs on imported goods? 0455/11 Oct/Nov 2013

24 Which of the following could not be a reason for imposing tariffs on imported goods? A to encourage self sufficiency B to lower the general price level within the economy C to protect a growing domestic industry D to reduce a balance of trade deficit

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2013

Q54 · A developing country’s two major sources of income from international trade are fishing… 0455/12 Oct/Nov 2013

26 A developing country’s two major sources of income from international trade are fishing and tourism. If the country’s exchange rate depreciated, what is likely to happen? A Imported goods would become cheaper for local people. B The country would definitely become poorer. C The price of fish sold as exports would become cheaper. D Tourists to the country would be discouraged by higher prices.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2013

Q55 · Which of the following could not be a reason for imposing tariffs on imported goods? 0455/12 Oct/Nov 2013

29 Which of the following could not be a reason for imposing tariffs on imported goods? A to encourage self sufficiency B to lower the general price level within the economy C to protect a growing domestic industry D to reduce a balance of trade deficit

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2013

Q56 · How does a tariff differ from a quota? 0455/13 Oct/Nov 2013

29 How does a tariff differ from a quota? A A tariff is on exports, a quota is on imports. B A tariff is on the quantity of an import, a quota is on the price of an import. C A tariff raises government revenue, a quota raises no government revenue. D A tariff raises the price at which imports sell, a quota does not.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2013

Q57 · The Sri Lankan government decides to offer financial support to local firms 0455/11 May/June 2014

28 The Sri Lankan government decides to offer financial support to local firms. Of what is this an example? A a quota B a subsidy C a tariff D exchange control

1 marks

Answer: B

This question in 0455/11 May/June 2014

Q58 · The Sri Lankan government decides to offer financial support to local firms 0455/13 May/June 2014

26 The Sri Lankan government decides to offer financial support to local firms. Of what is this an example? A a quota B a subsidy C a tariff D exchange control

1 marks

Answer: B

This question in 0455/13 May/June 2014

Q59 · Which change will increase the demand for imports? 0455/11 Oct/Nov 2014

28 Which change will increase the demand for imports? A Consumer credit becomes more expensive. B Income tax rates increase. C The exchange rate appreciates. D The government increases tariffs.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2014

Q60 · Which change will increase the demand for imports? 0455/12 Oct/Nov 2014

29 Which change will increase the demand for imports? A Consumer credit becomes more expensive. B Income tax rates increase. C The exchange rate appreciates. D The government increases tariffs.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2014

Q61 · Which change will increase the quantity of a country’s exports? 0455/13 Oct/Nov 2014

29 Which change will increase the quantity of a country’s exports? A Foreign governments raise tariff rates. B The country’s exchange rate depreciates. C The level of world income falls. D Transport costs become more expensive.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2014

Q62 · In September 2011 the Brazilian Government increased its tariff on imported Chinese cars 0455/13 Oct/Nov 2014

30 In September 2011 the Brazilian Government increased its tariff on imported Chinese cars. Which change might have increased the number of cars Brazil imported from China in October 2011? A a decrease in the quality of cars produced in Brazil B a decrease in the sales tax on cars produced in Brazil C an increase in the costs of producing cars in China D an increase in the value of China’s currency

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2014

Question 63 0455/11 May/June 2015

18 Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept for domestic use. What was the most likely outcome of the government’s action? A prices were fixed by the wheat producers B the amount produced was determined by the government C the price of wheat abroad fell D there was a redistribution of domestic production

1 marks

Answer: D

This question in 0455/11 May/June 2015

Q64 · Skin creams preventing sunburn made in the European Union (EU) are more effective than… 0455/11 May/June 2015

29 Skin creams preventing sunburn made in the European Union (EU) are more effective than those made in the United States (US). US tourists stock up on the creams when visiting Europe. Such creams are banned from production in the US because of the chemicals in them. In 2013, negotiations began to remove this ban in order to allow production in the US. How is this freer trade likely to affect manufacturers of skin creams in the US and the EU? manufacturers manufacturers in the US in the EU A gain gain B gain lose C lose gain D lose lose

1 marks

Answer: B

This question in 0455/11 May/June 2015

Question 65 0455/12 May/June 2015

18 Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept for domestic use. What was the most likely outcome of the government’s action? A prices were fixed by the wheat producers B the amount produced was determined by the government C the price of wheat abroad fell D there was a redistribution of domestic production

1 marks

Answer: D

This question in 0455/12 May/June 2015

Question 66 0455/13 May/June 2015

18 Russia exports wheat. In 2010, a bad harvest led the Russian government to prevent the export of wheat, to ensure enough supplies were kept for domestic use. What was the most likely outcome of the government’s action? A prices were fixed by the wheat producers B the amount produced was determined by the government C the price of wheat abroad fell D there was a redistribution of domestic production

1 marks

Answer: D

This question in 0455/13 May/June 2015

Q67 · The diagram shows the market for imported cars 0455/11 Oct/Nov 2015

28 The diagram shows the market for imported cars. S2 S1 price D O quantity of cars Which government action could be shown by the change in the diagram? A an embargo B an exchange rate revaluation (appreciation) C an import tax D a quota

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2015

Q68 · A country imposes tariffs and quotas on imported goods 0455/12 Oct/Nov 2015

28 A country imposes tariffs and quotas on imported goods. What will citizens of that country experience? A higher prices B higher welfare C higher unemployment D wider consumer choice

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2015

Q69 · Drinks producers in India are resisting plans to remove tariffs on imported drinks 0455/12 Feb/March 2016

28 Drinks producers in India are resisting plans to remove tariffs on imported drinks. They claim that a reduction in tariffs would destroy the emerging drinks industry with large-scale imports of cheap drinks. Which argument for protectionism are they putting forward? A the declining industry argument B the infant industry argument C the strategic industry argument D the sunset industry argument

1 marks

Answer: B

This question in 0455/12 Feb/March 2016

Q70 · Who is most likely to benefit if India bans all steel imports? 0455/12 Feb/March 2016

29 Who is most likely to benefit if India bans all steel imports? A buyers of steel in India B foreign steel producers C Indian firms buying steel D Indian firms selling steel at home

1 marks

Answer: D

This question in 0455/12 Feb/March 2016

Q71 · What is certain to encourage a higher level of international trade? 0455/12 Feb/March 2016

30 What is certain to encourage a higher level of international trade? A conservation of resources and unstable exchange rates B exploitation of resources and wider use of quotas C increased support for home industries and increased tariffs D more specialisation and falling transport costs

1 marks

Answer: D

This question in 0455/12 Feb/March 2016

Q72 · A country says that it wishes to increase its trade protection policies 0455/11 May/June 2016

28 A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on external costs B eliminating waste in the use of resources and grants to multinational companies C increased self sufficiency and increased tariffs D price controls and increased regulations on domestic monopoly industries

1 marks

Answer: C

This question in 0455/11 May/June 2016

Q73 · A country says that it wishes to increase its trade protection policies 0455/12 May/June 2016

28 A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on external costs B eliminating waste in the use of resources and grants to multinational companies C increased self sufficiency and increased tariffs D price controls and increased regulations on domestic monopoly industries

1 marks

Answer: C

This question in 0455/12 May/June 2016

Q74 · A country says that it wishes to increase its trade protection policies 0455/13 May/June 2016

28 A country says that it wishes to increase its trade protection policies. What might that involve? A conservation of resources and taxes on external costs B eliminating waste in the use of resources and grants to multinational companies C increased self sufficiency and increased tariffs D price controls and increased regulations on domestic monopoly industries

1 marks

Answer: C

This question in 0455/13 May/June 2016

Q75 · What encourages international specialisation? 0455/12 Oct/Nov 2016

27 What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotas

1 marks

This question in 0455/12 Oct/Nov 2016

Q76 · A government removed the quota on goods imported into the country 0455/12 Oct/Nov 2016

29 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

This question in 0455/12 Oct/Nov 2016

Q77 · What encourages international specialisation? 0455/13 Oct/Nov 2016

27 What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotas

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2016

Q78 · A Japanese car manufacturer decided to produce its cars in a factory in Europe 0455/13 Oct/Nov 2016

28 A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do this? A cheaper wage costs in Europe B the availability of raw materials C to gain external economies from skilled labour in Europe D to increase Japanese self-sufficiency

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2016

Q79 · A government removed the quota on goods imported into the country 0455/13 Oct/Nov 2016

29 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2016

Q80 · Which policy is a form of protectionism? 0455/12 Feb/March 2017

28 Which policy is a form of protectionism? A a tax on emissions B a tax on imports C a tax on income D a tax on property

1 marks

Answer: B

This question in 0455/12 Feb/March 2017

Q81 · When does free trade occur? 0455/12 Feb/March 2017

29 When does free trade occur? A when goods are exported with government subsidies B when goods are given as part of an aid programme C when goods are traded using barter D when goods face no import barriers

1 marks

Answer: D

This question in 0455/12 Feb/March 2017

Q82 · Which characteristic do developed and developing economies have in common? 0455/11 May/June 2017

24 Which characteristic do developed and developing economies have in common? A participation in international trade B high birth rates and high death rates C rapid economic growth D stable financial conditions and institutions

1 marks

Answer: A

This question in 0455/11 May/June 2017

Q83 · What is necessarily involved in international free trade? 0455/11 May/June 2017

28 What is necessarily involved in international free trade? A the absence of transport costs B the gift of foreign aid from charities C the supply of zero interest rate government loans D the unrestricted exchange of goods and services

1 marks

Answer: D

This question in 0455/11 May/June 2017

Q84 · Which government policy is most likely to increase the volume of exports? 0455/12 May/June 2017

27 Which government policy is most likely to increase the volume of exports? A devaluation B embargoes C quotas D tariffs

1 marks

Answer: A

This question in 0455/12 May/June 2017

Q85 · What might encourage international specialisation between countries? 0455/12 May/June 2017

28 What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tariffs

1 marks

Answer: A

This question in 0455/12 May/June 2017

Q86 · In 2015, Russia banned the imports of food, such as milk, from the European Union (EU) 0455/12 May/June 2017

29 In 2015, Russia banned the imports of food, such as milk, from the European Union (EU). Which outcomes are most likely to happen as a result? milk market price of milk profits of in Europe in Russia EU farmers A excess demand fall rise B excess demand rise rise C excess supply fall fall D excess supply rise fall

1 marks

Answer: D

This question in 0455/12 May/June 2017

Q87 · Which government policy is most likely to increase the volume of exports? 0455/13 May/June 2017

27 Which government policy is most likely to increase the volume of exports? A devaluation B embargoes C quotas D tariffs

1 marks

Answer: A

This question in 0455/13 May/June 2017

Q88 · Which method would both reduce imports and encourage exports? 0455/13 May/June 2017

28 Which method would both reduce imports and encourage exports? A embargoes on dangerous products B quotas on agricultural produce C subsidies on locally-produced electronics D tariffs on iron and steel products

1 marks

Answer: C

This question in 0455/13 May/June 2017

Q89 · In 2015, China was the world’s biggest importer of oil 0455/13 May/June 2017

30 In 2015, China was the world’s biggest importer of oil. In August 2015, China devalued its currency. What is likely to have happened? A The price of China’s exports fell and world oil prices rose as China’s demand decreased. B The price of China’s exports rose and world oil prices fell as China’s demand increased. C The price of China’s imports fell and world oil prices rose as China’s demand increased. D The price of China’s imports rose and world oil prices fell as China’s demand decreased.

1 marks

Answer: D

This question in 0455/13 May/June 2017

Q90 · An economy has a deficit on its balance of trade in manufactured goods 0455/11 Oct/Nov 2017

17 An economy has a deficit on its balance of trade in manufactured goods. Which government policy will reduce this deficit? A a decrease in subsidies paid to local manufacturers B an increase in interest rates C an increase in sales tax on locally manufactured goods D an introduction of import duties on manufactured goods

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2017

Q91 · What is a benefit of tariffs? 0455/11 Oct/Nov 2017

27 What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more trade

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2017

Q92 · What distinguishes a multinational company from other types of company? 0455/12 Oct/Nov 2017

13 What distinguishes a multinational company from other types of company? A It exports its products. B It imports its raw materials. C It produces outside its country of origin. D It promotes its products in trade fairs abroad.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2017

Q93 · What is a benefit of tariffs? 0455/12 Oct/Nov 2017

27 What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more trade

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2017

Q94 · It was reported in 2011 that the United States (US) needed to achieve a lower current… 0455/12 Oct/Nov 2017

29 It was reported in 2011 that the United States (US) needed to achieve a lower current account deficit. What would help this in the short run? A a protectionist policy B a strong exchange rate C increased private sector spending D investment in the US by multinational firms

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2017

Q95 · What is a benefit of tariffs? 0455/13 Oct/Nov 2017

27 What is a benefit of tariffs? A increased choice B increased government revenue C more competition D more trade

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2017

Q96 · What policy would encourage greater international specialisation? 0455/13 Oct/Nov 2017

30 What policy would encourage greater international specialisation? A the promotion of industrial diversification B the protection of new businesses C the reduction of tariffs D the subsidising of service industries

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2017

Q97 · A country has decided that it wants to increase free trade with its trading partners 0455/11 May/June 2018

27 A country has decided that it wants to increase free trade with its trading partners. Which measure would help it achieve this objective? A a higher quota on imported cars B a subsidy to domestic car producers C an embargo on cars produced in other countries D higher tariffs on imported goods

1 marks

Answer: A

This question in 0455/11 May/June 2018

Q98 · A country wishes to follow a policy of trade protection 0455/12 May/June 2018

27 A country wishes to follow a policy of trade protection. Which action would it take? A increase the level of import quotas B reduce import tariffs C remove exchange controls D subsidise export producers

1 marks

Answer: D

This question in 0455/12 May/June 2018

Q99 · What would have the most severe restriction on the volume of international trade in steel? 0455/13 May/June 2018

27 What would have the most severe restriction on the volume of international trade in steel? A an embargo B a licence system C a quota D a tariff

1 marks

Answer: A

This question in 0455/13 May/June 2018

Q100 · What is a valid economic argument in favour of trade protection? 0455/11 Oct/Nov 2018

27 What is a valid economic argument in favour of trade protection? A It allows greater consumer choice. B It encourages trade liberalisation. C It helps support infant industries. D It keeps prices lower.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2018

Q101 · Which government policy is most likely to improve a country’s balance of trade? 0455/11 Oct/Nov 2018

29 Which government policy is most likely to improve a country’s balance of trade? A a decrease in direct taxation B a decrease in the exchange rate C a decrease in the level of tariffs D an increase in government expenditure

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2018

Q102 · The table shows the tariffs imposed on imported tropical fruit in the European Union (EU)… 0455/11 Oct/Nov 2018

30 The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs (% rate) fresh tropical fruit 8.0 canned tropical fruit 11.3 bottled tropical fruit drinks 23.6 What might be the reason for this pattern of tariffs? A to encourage imports of processed products into the EU B to encourage tropical countries’ exports C to help manufacturing industries in the EU D to help tropical countries develop manufacturing industries

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2018

Q103 · The table shows the tariffs imposed on imported tropical fruit in the European Union (EU)… 0455/12 Oct/Nov 2018

30 The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs (% rate) fresh tropical fruit 8.0 canned tropical fruit 11.3 bottled tropical fruit drinks 23.6 What might be the reason for this pattern of tariffs? A to encourage imports of processed products into the EU B to encourage tropical countries’ exports C to help manufacturing industries in the EU D to help tropical countries develop manufacturing industries

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2018

Q104 · A government imposes a limit of 2 million on the number of smartphones imported into the… 0455/13 Oct/Nov 2018

27 A government imposes a limit of 2 million on the number of smartphones imported into the country. Which term is given to this limitation? A ban B embargo C quota D tariff

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2018

Q105 · The table shows the tariffs imposed on imported tropical fruit in the European Union (EU)… 0455/13 Oct/Nov 2018

30 The table shows the tariffs imposed on imported tropical fruit in the European Union (EU) according to the degree of processing. EU tariffs (% rate) fresh tropical fruit 8.0 canned tropical fruit 11.3 bottled tropical fruit drinks 23.6 What might be the reason for this pattern of tariffs? A to encourage imports of processed products into the EU B to encourage tropical countries’ exports C to help manufacturing industries in the EU D to help tropical countries develop manufacturing industries

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2018

Q106 · Which measure would a government take to reduce a current account deficit? 0455/12 Feb/March 2019

16 Which measure would a government take to reduce a current account deficit? A increase tariffs B increase value added tax C reduce income tax D reduce domestic subsidies

1 marks

Answer: A

This question in 0455/12 Feb/March 2019

Q107 · A country imposes tariffs and quotas on imported goods 0455/12 Feb/March 2019

28 A country imposes tariffs and quotas on imported goods. What will citizens of that country experience? A higher prices B higher unemployment C higher welfare D wider consumer choice

1 marks

Answer: A

This question in 0455/12 Feb/March 2019

Q108 · Skin creams preventing sunburn made in the European Union (EU) are more effective than… 0455/12 Feb/March 2019

30 Skin creams preventing sunburn made in the European Union (EU) are more effective than those made in the United States (US). US tourists stock up on the creams when visiting Europe. Such creams are banned from production in the US because of the chemicals in them. In 2013, negotiations began to remove this ban in order to allow production in the US. How is this freer trade likely to affect manufacturers of skin creams in the US and the EU? manufacturers manufacturers in the US in the EU A gain gain B gain lose C lose gain D lose lose

1 marks

Answer: B

This question in 0455/12 Feb/March 2019

Q109 · The US government decides to reduce the size of the quota on a good it buys from China 0455/11 May/June 2019

27 The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become cheaper in the US. B The US balance of trade will worsen. C The US government’s revenue will decline. D There will be less of the good imported into the US.

1 marks

Answer: D

This question in 0455/11 May/June 2019

Q110 · In 2013, the European Union (EU) levied a 48% tariff on low-priced Chinese solar panels… 0455/11 May/June 2019

29 In 2013, the European Union (EU) levied a 48% tariff on low-priced Chinese solar panels because the low price was the result of subsidies from the Chinese government. Which argument for protectionism was the EU using? A the anti-dumping argument B the infant industry argument C the strategic industry argument D the sunset industry argument

1 marks

Answer: A

This question in 0455/11 May/June 2019

Q111 · Why might a government decide to subsidise a high-cost steel industry? 0455/12 May/June 2019

19 Why might a government decide to subsidise a high-cost steel industry? A if cheaper imports of steel are improving the balance of payments B if economic growth is increasing due to the success of other industries C if redundant steel workers can easily be retrained D if unemployment in steel producing areas is increasing

1 marks

Answer: D

This question in 0455/12 May/June 2019

Q112 · The US government decides to reduce the size of the quota on a good it buys from China 0455/12 May/June 2019

27 The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become cheaper in the US. B The US balance of trade will worsen. C The US government’s revenue will decline. D There will be less of the good imported into the US.

1 marks

Answer: D

This question in 0455/12 May/June 2019

Q113 · A large amount of the agricultural products in a country were damaged by floods 0455/12 May/June 2019

30 A large amount of the agricultural products in a country were damaged by floods. What is likely to have happened to the price of agricultural products and the volume of imports of agricultural products? price of products volume of imports A fall fall B fall rise C rise fall D rise rise

1 marks

Answer: D

This question in 0455/12 May/June 2019

Q114 · The US government decides to reduce the size of the quota on a good it buys from China 0455/13 May/June 2019

27 The US government decides to reduce the size of the quota on a good it buys from China. What is likely to happen? A The good will become cheaper in the US. B The US balance of trade will worsen. C The US government’s revenue will decline. D There will be less of the good imported into the US.

1 marks

Answer: D

This question in 0455/13 May/June 2019

Q115 · A large amount of the agricultural products in a country were damaged by floods 0455/13 May/June 2019

30 A large amount of the agricultural products in a country were damaged by floods. What is likely to have happened to the price of agricultural products and the volume of imports of agricultural products? price of products volume of imports A fall fall B fall rise C rise fall D rise rise

1 marks

Answer: D

This question in 0455/13 May/June 2019

Q116 · Protectionist policies reduce the level of global economic growth 0455/11 Oct/Nov 2019

28 Protectionist policies reduce the level of global economic growth. What is a possible reason for this? A Incomes earned from trading decline. B Tariffs encourage trade. C The average cost of production decreases. D The production possibility of an economy expands.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2019

Q117 · What would reduce the volume of international trade in the world economy? 0455/11 Oct/Nov 2019

30 What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese car manufacturer establishing a factory in the Czech Republic C the Canadian government introducing quotas on Malaysian electronics products D the Swedish government granting aid to Somalia

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2019

Q118 · What is a disadvantage of trade protection of manufactured goods? 0455/12 Oct/Nov 2019

28 What is a disadvantage of trade protection of manufactured goods? A It can lead to retaliation from trading partners. B It encourages infant industries to grow. C It increases demand for domestic manufactured goods. D It reduces outflows of currencies to pay for imports.

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2019

Q119 · What would reduce the volume of international trade in the world economy? 0455/12 Oct/Nov 2019

30 What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese car manufacturer establishing a factory in the Czech Republic C the Canadian government introducing quotas on Malaysian electronics products D the Swedish government granting aid to Somalia

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2019

Q120 · A newspaper headline stated ‘Free trade helps the world’s poorest’ 0455/13 Oct/Nov 2019

28 A newspaper headline stated ‘Free trade helps the world’s poorest’. Why might this be correct? A Employment will be focused in hi-tech industries. B Environmental disasters will be avoided. C Free trade reduces competitiveness for domestic firms. D The cost of living is likely to go down with free trade.

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2019

Q121 · What would reduce the volume of international trade in the world economy? 0455/13 Oct/Nov 2019

30 What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese car manufacturer establishing a factory in the Czech Republic C the Canadian government introducing quotas on Malaysian electronics products D the Swedish government granting aid to Somalia

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2019

Q122 · What is the most likely effect of a decrease in tariffs? 0455/12 Feb/March 2020

27 What is the most likely effect of a decrease in tariffs? A increased inflation rates B increased consumer choices C increased government revenue from tariffs D increased revenues of domestic firms

1 marks

This question in 0455/12 Feb/March 2020

Q123 · What is a quota in international trade? 0455/11 May/June 2020

27 What is a quota in international trade? A a government grant to encourage production B an administrative and technical barrier C a limit on the quantity of imports D a tax on imports

1 marks

Answer: C

This question in 0455/11 May/June 2020

Q124 · Many low-income countries rely on exports of raw materials such as coffee or iron ore to… 0455/11 May/June 2020

28 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? A Countries have a constant demand for raw materials. B International trade only benefits the importing countries. C It is necessary for low-income countries to belong to a free trade area. D Raw materials have fluctuating prices.

1 marks

Answer: D

This question in 0455/11 May/June 2020

Q125 · Which protectionist measure would be most suitable for a government to use to support the… 0455/12 May/June 2020

27 Which protectionist measure would be most suitable for a government to use to support the growth in exports of an industry? A embargo B quota C subsidy D tariff

1 marks

Answer: C

This question in 0455/12 May/June 2020

Q126 · What are the effects on price and equilibrium quantity of the imposition of an import… 0455/13 May/June 2020

27 What are the effects on price and equilibrium quantity of the imposition of an import tariff on a good? price equilibrium quantity A decreases decreases B decreases increases C increases decreases D increases increases

1 marks

Answer: C

This question in 0455/13 May/June 2020

Q127 · A low-income country experiences extreme poverty in its rural areas 0455/11 Oct/Nov 2020

24 A low-income country experiences extreme poverty in its rural areas. What is a possible cause of this? A development of better irrigation techniques B distribution of international food aid C high trade barriers imposed by high-income countries D higher prices for agricultural produce

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2020

Q128 · A government is faced with an unwanted deficit on the current account of its balance of… 0455/11 Oct/Nov 2020

27 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? A raising government spending on welfare benefits B reducing income tax C restricting imports by raising tariffs D revaluing its currency

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2020

Q129 · A country wishes to increase a current account surplus on the balance of payments 0455/12 Oct/Nov 2020

28 A country wishes to increase a current account surplus on the balance of payments. Which action would it take? A abolish an import quota B increase import tariffs C remove export subsidies D tax export producers

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2020

Q130 · What is most likely to discourage international specialisation and trade for an economy? 0455/13 Oct/Nov 2020

28 What is most likely to discourage international specialisation and trade for an economy? A decreasing labour supply B decreasing transport costs C increasing oil prices D increasing trade barriers

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2020

Q131 · Many low-income countries rely on multinational companies (MNCs) to provide economic… 0455/13 Oct/Nov 2020

29 Many low-income countries rely on multinational companies (MNCs) to provide economic development. What is a disadvantage of this for the low-income country? A Local firms close because MNCs are more efficient. B New production techniques are introduced. C The balance of payments may improve. D The MNCs have to pay taxes on their profits.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2020

Q132 · Which method of trade protection would enable domestic firms to lower their prices and… 0455/12 Feb/March 2021

27 Which method of trade protection would enable domestic firms to lower their prices and undercut the price of imported goods? A a subsidy B a tariff C an embargo D an import quota

1 marks

Answer: A

This question in 0455/12 Feb/March 2021

Q133 · How might a multinational company (MNC) directly benefit a host country? 0455/12 Feb/March 2021

28 How might a multinational company (MNC) directly benefit a host country? A It creates local employment. B It depletes local natural resources. C It imports raw materials. D It receives tax concessions.

1 marks

Answer: A

This question in 0455/12 Feb/March 2021

Q134 · Which method of protection always reduces the supply of an imported good to zero? 0455/11 May/June 2021

28 Which method of protection always reduces the supply of an imported good to zero? A embargo B quota C subsidy D tariff

1 marks

Answer: A

This question in 0455/11 May/June 2021

Q135 · What is the most likely benefit for a low-income economy if it removes tariffs on… 0455/12 May/June 2021

27 What is the most likely benefit for a low-income economy if it removes tariffs on imported goods and services? A more choice for domestic consumers B more employment in declining industries C more exports by domestic firms D more tax revenue from imports

1 marks

Answer: A

This question in 0455/12 May/June 2021

Q136 · Economies have become increasingly linked through globalisation 0455/12 May/June 2021

28 Economies have become increasingly linked through globalisation. What would discourage this? A creation of a single world market B direct foreign investment by multinational companies C expansion of trade in financial services D protectionist policies by trading groups

1 marks

Answer: D

This question in 0455/12 May/June 2021

Q137 · What is a benefit of a multinational company (MNC) to the host country? 0455/13 May/June 2021

27 What is a benefit of a multinational company (MNC) to the host country? A A MNC may improve the reputation of its home country as a high-quality producer. B Exports by a MNC may result in an improved trade balance for the host country. C Production by a MNC may lead to higher levels of pollution in the host country. D Profits made by a MNC are sent back to its home country.

1 marks

Answer: B

This question in 0455/13 May/June 2021

Q138 · Globalisation is the process by which domestic firms become involved in international… 0455/13 May/June 2021

28 Globalisation is the process by which domestic firms become involved in international markets. What encourages globalisation? A controls on foreign exchange B immigration restrictions C increasing tariffs D widespread use of the internet

1 marks

Answer: D

This question in 0455/13 May/June 2021

Q139 · Why do some governments limit the operations of multinational companies (MNCs) within… 0455/11 Oct/Nov 2021

29 Why do some governments limit the operations of multinational companies (MNCs) within their domestic economy? A MNCs contribute to technological advances. B MNCs decrease a country’s unemployment rate. C MNCs gain profits which are transferred out of the country. D MNCs increase a country’s current account surplus.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2021

Q140 · The US imposed tariffs on cars and motorcycles from Germany 0455/12 Oct/Nov 2021

29 The US imposed tariffs on cars and motorcycles from Germany. What is the effect of these tariffs? A decrease in inflation in the US B decrease in trade between the US and Germany C increase in profits of car and motorcycle producers from Germany D increase in standards of living in the US and in Germany

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2021

Q141 · What is a reason for trade protection? 0455/13 Oct/Nov 2021

29 What is a reason for trade protection? A to reduce a deficit on the current account of the balance of payments B to reduce a surplus on the current account of the balance of payments C to reduce economic growth D to reduce inflation

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2021

Q142 · The US government introduces tariffs on steel imported from China 0455/11 May/June 2022

4 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? Chinese steel US government producers A yes yes B yes no C no yes D no no

1 marks

Answer: C

This question in 0455/11 May/June 2022

Q143 · A government removed the quota on goods imported into the country 0455/11 May/June 2022

15 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/11 May/June 2022

Q144 · A government removed the quota on goods imported into the country 0455/12 May/June 2022

28 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/12 May/June 2022

Q145 · The governments of low-income countries often allow foreign multinational companies… 0455/12 May/June 2022

30 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? benefit cost A improved balance of trade training by the MNCs B higher employment loss of a finite resource C increased profits for the MNCs efficient production D more sustainable development economic growth

1 marks

Answer: B

This question in 0455/12 May/June 2022

Q146 · Which action is not performed by a government as part of its international role? 0455/13 May/June 2022

23 Which action is not performed by a government as part of its international role? A building offshore wind farms B imposing tariffs on imports C issuing visas to foreign tourists D providing humanitarian aid to refugees

1 marks

Answer: A

This question in 0455/13 May/June 2022

Q147 · A government removed the quota on goods imported into the country 0455/13 May/June 2022

28 A government removed the quota on goods imported into the country. What is the most likely result of this? A a decrease in demand for domestic production B a decrease in domestic unemployment C a decrease in exports D a decrease in the balance of trade deficit

1 marks

Answer: A

This question in 0455/13 May/June 2022

Q148 · The governments of low-income countries often allow foreign multinational companies… 0455/13 May/June 2022

30 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? benefit cost A improved balance of trade training by the MNCs B higher employment loss of a finite resource C increased profits for the MNCs efficient production D more sustainable development economic growth

1 marks

Answer: B

This question in 0455/13 May/June 2022

Q149 · Which row shows the potential benefits of free trade to consumers, producers and the… 0455/11 Oct/Nov 2022

29 Which row shows the potential benefits of free trade to consumers, producers and the economy? consumers producers economy A higher income lower costs deflation B lower quality higher prices greater equality C lower prices increased competition higher current account deficit D more choices larger market lower unemployment

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2022

Q150 · What is a restriction on the quantity of imports called? 0455/12 Oct/Nov 2022

29 What is a restriction on the quantity of imports called? A dumping B quota C subsidy D tariff

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2022

Q151 · Which combination of factors would attract a multinational company (MNC) producing… 0455/12 Oct/Nov 2022

30 Which combination of factors would attract a multinational company (MNC) producing smartphones to operate in a low-income country? A high economic growth rate and supply of cheap labour B low corporation tax and competitive local market C limited supply of skilled workers and cheap land D strict employment laws and high import duties

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2022

Q152 · Country X produces cars and also imports cars 0455/13 Oct/Nov 2022

29 Country X produces cars and also imports cars. Which group is least likely to benefit from the introduction of an import tariff on cars? A consumers of cars in country X B producers of cars in country X C the government of country X D workers making cars in country X

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2022

Q153 · What is a quota in international trade? 0455/12 Feb/March 2023

28 What is a quota in international trade? A a government grant to encourage production B a limit on the quantity of imports C a tax on imports D an administrative and technical barrier

1 marks

Answer: B

This question in 0455/12 Feb/March 2023

Q154 · It is cheaper for developed economies to buy some cereals from developing economies than… 0455/11 May/June 2023

27 It is cheaper for developed economies to buy some cereals from developing economies than to produce them domestically. What might reduce international trade in cereals? A Cereals become less popular with the population of developing economies. B Developed economies place an embargo on cereal imports to prevent disease. C Governments tax cereal production in developed economies. D Producers of cereals in developing economies are subsidised.

1 marks

Answer: B

This question in 0455/11 May/June 2023

Q155 · A country imposes a quota on imported cars 0455/11 May/June 2023

28 A country imposes a quota on imported cars. What is the most likely outcome of this action? A a decrease in the domestic output of cars B a decrease in the domestic price of cars C an increase in the tax revenue from car imports D an increase in the total revenue of domestic car producers

1 marks

Answer: D

This question in 0455/11 May/June 2023

Q156 · Which policy measure is most likely to reduce the current account deficit of the balance… 0455/11 May/June 2023

30 Which policy measure is most likely to reduce the current account deficit of the balance of payments of an economy? A decrease the level of subsidies to domestic producers B increase infrastructure spending to increase domestic productivity C increase interest rates D remove import tariffs

1 marks

Answer: B

This question in 0455/11 May/June 2023

Q157 · Country X exports steel to country Y at a price below its cost of production 0455/12 May/June 2023

28 Country X exports steel to country Y at a price below its cost of production. This has led to a fall in demand for steel produced in country Y. What is a method of trade protection that country Y could use to reduce the imports of steel from country X? A apply anti-dumping tariffs B increase interest rates C revalue the currency D subsidise the export of steel

1 marks

Answer: A

This question in 0455/12 May/June 2023

Q158 · Country X has a persistent deficit on the current account of the balance payments 0455/12 May/June 2023

30 Country X has a persistent deficit on the current account of the balance payments. Which policy measure is most likely to improve this situation? A lowering import quotas B lowering income tax C lowering import tariffs D lowering export subsidies

1 marks

Answer: A

This question in 0455/12 May/June 2023

Q159 · What is certain to encourage a higher level of international trade? 0455/13 May/June 2023

27 What is certain to encourage a higher level of international trade? A conservation of resources and unstable exchange rates B exploitation of resources and wider use of quotas C increased support for home industries and increased tariffs D more specialisation and falling transport costs

1 marks

Answer: D

This question in 0455/13 May/June 2023

Q160 · The import of a product from another country has been banned 0455/13 May/June 2023

28 The import of a product from another country has been banned. Which term describes this method of protection? A embargo B exchange control C quota D tariff

1 marks

Answer: A

This question in 0455/13 May/June 2023

Q161 · A country imposes a tariff on an imported product 0455/11 Oct/Nov 2023

28 A country imposes a tariff on an imported product. What is the effect of this change? the quantity of the the price of the product imported product increases is fixed A no no B no yes C yes no D yes yes

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2023

Q162 · Which benefit do multinational companies (MNCs) bring to their home country? 0455/11 Oct/Nov 2023

30 Which benefit do multinational companies (MNCs) bring to their home country? A flow of profits B higher wages C increased employment D more investment

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2023

Q163 · Country X believes that country Y is selling steel at prices below the average cost of… 0455/12 Oct/Nov 2023

28 Country X believes that country Y is selling steel at prices below the average cost of production. So, country X imposes a higher tariff on steel imports from country Y. What does country X hope to achieve by imposing this higher tariff? A avoid country X dumping steel in country Y B avoid country Y dumping steel in country X C reduce inflation in country X D reduce inflation in country Y

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2023

Q164 · Country X established free trade agreements with other nations 0455/13 Oct/Nov 2023

28 Country X established free trade agreements with other nations. What would be the intended benefit of such agreements to country X? A increased labour shortages B increased tariff revenue C more efficient allocation of resources D protection from low wage competition

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2023

Q165 · What is a likely effect of imposing a tariff? 0455/12 Feb/March 2024

28 What is a likely effect of imposing a tariff? A It encourages home industries to be more efficient. B It increases the demand for home-produced goods. C It reduces the price of home-produced goods. D It reduces the price of imports.

1 marks

Answer: B

This question in 0455/12 Feb/March 2024

Q166 · The diagram shows the market for an imported good with equilibrium at point X 0455/12 May/June 2024

27 The diagram shows the market for an imported good with equilibrium at point X. The country imposes a tariff on this good. Is the new equilibrium at point A, B, C or D? price S1 B A S X S2 C D D D1 O quantity

1 marks

Answer: B

This question in 0455/12 May/June 2024

Q167 · What are the effects on price and equilibrium quantity of the imposition of an import… 0455/13 May/June 2024

28 What are the effects on price and equilibrium quantity of the imposition of an import tariff on a good? equilibrium price quantity A decreases decreases B decreases increases C increases decreases D increases increases

1 marks

Answer: C

This question in 0455/13 May/June 2024

Q168 · A multinational company (MNC) opens up a new factory in a host country 0455/11 Oct/Nov 2024

28 A multinational company (MNC) opens up a new factory in a host country. What is a possible cost of this new factory to the host country? A increased access to modern technology B increased competition for host-country industries C increased employment for workers D increased tax revenue for the government

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2024

Q169 · A government wishes to stop the dumping of a specific imported good at a very low price 0455/12 Oct/Nov 2024

28 A government wishes to stop the dumping of a specific imported good at a very low price. Which method of protection would be most effective? A apply an embargo to this good B devalue the currency C increase interest rates D provide subsidies to home producers of this good The price of the US dollar in terms of other currencies is set by the forces of demand and supply.

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2024

Q170 · What encourages international specialisation? 0455/13 Oct/Nov 2024

27 What encourages international specialisation? A a foreign exchange shortage B diseconomies of scale C free trade D quotas

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2024

Q171 · A country wants to limit the number of imported cars to a maximum of 100 000 in a year 0455/13 Oct/Nov 2024

28 A country wants to limit the number of imported cars to a maximum of 100 000 in a year. Which measure is most likely to achieve this objective? A an embargo B an import quota C an import tariff D a subsidy

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2024

Q172 · The US puts a 25% tariff on Chinese steel to protect jobs in the US steel industry 0455/12 Feb/March 2025

28 The US puts a 25% tariff on Chinese steel to protect jobs in the US steel industry. Under which condition would this policy be most effective? A The price elasticity of demand for Chinese steel is –2.5. B The price elasticity of demand for Chinese steel is –0.5. C The price elasticity of supply for Chinese steel is 2.5. D The price elasticity of supply for Chinese steel is zero.

1 marks

Answer: A

This question in 0455/12 Feb/March 2025

Q173 · What might an economist consider to be meant by the term dumping? 0455/11 May/June 2025

28 What might an economist consider to be meant by the term dumping? A foreign firms exporting waste products B foreign firms producing goods at a lower cost than domestic firms C foreign firms selling goods that are out of fashion D foreign firms exporting products at a price below the cost of production

1 marks

Answer: D

This question in 0455/11 May/June 2025

Q174 · Mining by multinational companies (MNCs) has both costs and benefits for the host nation 0455/12 May/June 2025

28 Mining by multinational companies (MNCs) has both costs and benefits for the host nation. Which activity is least likely to offer a benefit to the host nation? A developing courses for training in mining B investing in infrastructure to export minerals C repatriating profits and dividends D using new technology

1 marks

Answer: C

This question in 0455/12 May/June 2025

Q175 · Country Y decides to specialise in the domestic mining of rare metals required in the… 0455/13 May/June 2025

27 Country Y decides to specialise in the domestic mining of rare metals required in the production of electric-car batteries. What is a likely benefit of this for country Y? A increased emigration B increased exports C increased imports D increased tariff revenue

1 marks

Answer: B

This question in 0455/13 May/June 2025

Q176 · The UK government increases the price of steel imported from Germany by increasing an… 0455/13 May/June 2025

28 The UK government increases the price of steel imported from Germany by increasing an existing tariff. Assuming steel has price-inelastic demand, what would be the effect on the revenues of German steel producers and the UK government? German steel UK producers’ government revenue revenue A decrease decrease B decrease increase C increase decrease D increase increase

1 marks

Answer: B

This question in 0455/13 May/June 2025

Q177 · Which government action would not be included as part of a supply-side policy? 0455/11 Oct/Nov 2025

20 Which government action would not be included as part of a supply-side policy? A increasing the privatisation of industries B lowering national minimum wage rates C raising tariffs on international trade D reducing state benefits

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2025

Q178 · Which government policy would encourage greater international trade? 0455/11 Oct/Nov 2025

28 Which government policy would encourage greater international trade? A an increase in the level of domestic regulation B an increase in the level of tariffs on imports C the abolition of domestic subsidies for declining industries D the abolition of free trade agreements

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2025

Q179 · A government imposes tariffs on imported goods 0455/12 Oct/Nov 2025

17 A government imposes tariffs on imported goods. What is not a likely reason for this? A to boost domestic output B to influence the country’s balance of payments C to protect domestic employment D to reduce the exports from the country

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2025

Q180 · An economy raises its tariffs on imported goods 0455/12 Oct/Nov 2025

28 An economy raises its tariffs on imported goods. What is the most likely result? A a fall in the rate of inflation B an increase in consumer choice C an increase in domestic production D the current account of the balance of payments moves into a deficit

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2025

Q181 · A government wishes to reduce the deficit on the current account of its balance of… 0455/12 Oct/Nov 2025

30 A government wishes to reduce the deficit on the current account of its balance of payments. Which policy should it adopt? A increase subsidies on exports B increase taxes on its exports C remove an embargo on imports D remove tariffs on its imports

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2025

Q182 · What is not a likely benefit of free trade? 0455/13 Oct/Nov 2025

28 What is not a likely benefit of free trade? A consumers should experience lower prices B consumers should have a greater choice of goods C firms could be protected from foreign competition D firms could take advantage of economies of scale

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2025

Q183 · What is a likely government policy to reduce a deficit on the current account of the… 0455/13 Oct/Nov 2025

30 What is a likely government policy to reduce a deficit on the current account of the balance of payments? A increasing the value of the foreign exchange rate B increasing training for workers in export industries C reducing subsidies to domestic export industries D reducing tariffs on imported goods and services

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2025