the indaicent
Trade and Development — Paper 2 Questions
-AD/AS Diagram to explain effect on national output
1) Using information from the text/data and your knowledge of economics, discuss the likely impact of an appreciating currency on the performance of the Philippine (or any) economy.
More likely to import less likely to export (reduction in AD)
Increase in demand of Philippine currency
Decrease in supply of Philippine currency
More wealth abroad (increased real wealth)
Cyclical unemployment
Value of foreign debt falls (money owed to other countries becomes relatively less significant)
Increased current account deficit
2) Explain effect of Tariffs
(Draw the graph) tax on imports increased government revenue foreign producers lose domestic producers win
3) Distinguish between a free trade area (such as ASEAN), a customs union and a common market
Free Trade Area
Eliminate trade barriers between themselves
Each country has different trade barriers
Customs Union
Similar to FTA, but agree on policies for non member countries
Common Market removes all barriers of entry, eliminating non‑tariff barriers to trade
4) Evaluate effects of various trade agreements *Need a case
5) Using an appropriate diagram, explain how the provision of hospital services has positive externalities
6) Evaluate fair trade as a means of improving the welfare of people
7) Define the following terms indicated in bold in the text: sustainable development
8) evaluate the arguments for and against the “foreign direct investment” 9) Using a production possibility curve (PPC) diagram, explain how micro-credit schemes can affect the actual output and the production possibilities of an economy.
PPC curve showing increase (outward shift of PPC) in production possibilities or increase in actual output (movement of point towards curve)
Micro-credit may allow for an increase in actual output of the economy or an increase in quality/quantity
-AD/AS Diagram to explain effect on national output
1) Using information from the text/data and your knowledge of economics, discuss the likely impact of an appreciating currency on the performance of the Philippine (or any) economy.
More likely to import less likely to export (reduction in AD)
Increase in demand of Philippine currency
Decrease in supply of Philippine currency
More wealth abroad (increased real wealth)
Cyclical unemployment
Value of foreign debt falls (money owed to other countries becomes relatively less significant)
Increased current account deficit
2) Explain effect of Tariffs
(Draw the graph) tax on imports increased government revenue foreign producers lose domestic producers win
3) Distinguish between a free trade area (such as ASEAN), a customs union and a common market
Free Trade Area
Eliminate trade barriers between themselves
Each country has different trade barriers
Customs Union
Similar to FTA, but agree on policies for non member countries
Common Market removes all barriers of entry, eliminating non‑tariff barriers to trade
4) Evaluate effects of various trade agreements *Need a case
5) Using an appropriate diagram, explain how the provision of hospital services has positive externalities
6) Evaluate fair trade as a means of improving the welfare of people
7) Define the following terms indicated in bold in the text: sustainable development
8) evaluate the arguments for and against the “foreign direct investment” 9) Using a production possibility curve (PPC) diagram, explain how micro-credit schemes can affect the actual output and the production possibilities of an economy.
PPC curve showing increase (outward shift of PPC) in production possibilities or increase in actual output (movement of point towards curve)
Micro-credit may allow for an increase in actual output of the economy or an increase in quality/quantity