4. Global economics

Question 1

The increased _____ of economies has benefits and costs

Answer 1

Interdependence

Question 2

Increased economic integration may result in _____, welfare gains, and improvements in _____, but the benefits may not result in _____

Answer 2

Efficiency, economic well-being, equity

Question 3

4.1 Benefits of international trade (AO2, AO4)

Answer 3

1. Increased competition
2. Lower prices
3. Greater choice
4. Acquisition of resources
5. More foreign exchange earnings
6. Access to larger markets
7. Economies of scale
8. More efficient resource allocation
9. More efficient production

Question 4

4.1 Diagram: Free trade illustrating exports when world price is ABOVE domestic price

Question 5

4.1 Diagram: Free trade illustrating exports when world price is BELOW domestic price

Question 6

4.1 Calculation: From a diagram, Q(export), Q(imports), import expenditure, export revenue

Question 7

4.1 Define