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.

• A

• B

• C

• D

What is an advantage if a region specialises in a narrow range of products?

A Other regions will become over-dependent on the region.

B Scarce resources are used more efficiently.

C The level of production in the region will decrease.

D The region’s system of transport is improved

• A

• B

• C

• D

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

• A

• B

• C

• D

In 2012 the UK held the Olympic Games which attracted a large number of visitors from foreign countries. Which item of the UK’s current account balance will have benefitted directly from this event?

A export trade in goods

B export trade in services

C import trade in goods

D import trade in services

• A

• B

• C

• D

Vietnamese companies buy insurance from companies in the United States (US). How will this transaction be recorded in the Vietnamese balance of payments?

• A

• B

• C

• D

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

• A

• B

• C

• D

There was an increase in the value of the United States (US) dollar against the South African Rand. What is a result of this?

A an increase in the number of exports from the US to South Africa

B an increase in the number of imports to the US from South Africa

C fewer people from the US spend holidays in South Africa

D more people from South Africa spend holidays in the US

• A

• B

• C

• D

Firms often advertise saying that they specialise in providing a certain product or service. What is an advantage of such specialisation to the firm?

A Its workers are motivated by more varied tasks.

B Production is dependent on other firms supplying components.

C The firm’s average cost of production is likely to fall.

D The firm can quickly adapt production if their product or service is no longer required.

• A

• B

• C

• D

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

• A

• B

• C

• D

What is more likely to result from rather than cause economic development?

A a depletion of non-renewable resources

B a move towards free trade

C a stable political and legal system

D more private and less public sector activity

• A

• B

• C

• D