International trade and finance – Questions and Answers

Subject Title: Economics Revision Kit

TOPIC: International trade and finance

QUESTION 1
April 2022 Question Four A
Assess five forms of economic integration as used in international trade. (10 marks)

QUESTION 2
December 2021 Question Five A and B
(a) Highlight five advantages of using a free exchange rate system in an economy.
(5 marks)
(b) Enumerate seven criticisms levelled against the theory of comparative advantage.
(7 marks)
QUESTION 3
December 2021 Question Seven C
Outline seven limitations of regional economic integration in developing countries.
(7 marks)
QUESTION 4
August 2021 Question Five D
Discuss three roles played by the International Monetary Fund (IMF) in the world economy. (6 marks)

QUESTION 5
May 2021 Question Five B
Examine five reasons for deteriorating terms of trade for developing countries.
(10 marks)
QUESTION 6
May 2021 Question Six B
Examine four advantages of currency devaluation to a country’s economy. (8 marks)

QUESTION 7
November 2020 Question seven A
Summarise six corrective measures that developing countries should institute to correct the persistent deficits in their balance of payments position. (6 marks)

QUESTION 8
November 2020 Question seven B
Discuss four policy recommendations that developing countries should institute to reduce regional imbalances in their economies. (8 marks)

QUESTION 9
November 2020 Question seven C
Justify six reasons why external debt problems is a major policy issue in developing countries. (6 marks)

QUESTION 10
November 2019 Question Five B and C
Explain six factors that determine the level of induced investments in an economy.
(6 marks)
QUESTION 11
November 2019 Question Five C
The value of money varies inversely with the level of prices.

With reference to the above statement, justify six positive economic effects of a prolonged fall in the value of money in an economy. (6 marks)

QUESTION 12
November 2019 Question Six A B and C
Identify four reasons against international trade restrictions. (8 marks)

QUESTION 13
November 2019 Question Six B
Summarise four functions of World Trade Organisation (WTO). (4 marks)

QUESTION 14
November 2019 Question Six C
The citizens of your country have raised concern over the increased rate of Foreign Direct Investment in your country.

Required:
Assess four cases in favour of and four cases against Foreign Direct Investment in an economy. (8 marks)

QUESTION 15
November 2019 Question Seven C
Distinguish between “depreciation of a currency” and “demonetisation of the currency”.
(4 marks)
QUESTION 16
November 2019 Question Seven C
Highlight six possible effects of demonetisation of the currency, (6 marks)

QUESTION 17
May 2019 Question Five C
Outline six limitations of the theory of comparative advantage as used in international trade. (6 marks)

QUESTION 18
May 2019 Question Six A
Examine three roles of foreign exchange reserves in an economy. (3 marks)

QUESTION 19
May 2019 Question Six B
Describe six factors that determine the terms of trade in a country. (6 marks)

QUESTION 20
November 2018 Question Five B
Outline five limitations of adopting export promotion strategy in developing countries.
(5 marks)
QUESTION 21
November 2018 Question Six C
Discuss seven disadvantages of adopting an import substitution strategy to control unfavourable balance of payments in a developing country. (7 marks)

QUESTION 22
May 2018 Question Two B
Explain six reasons why a country might impose international trade restrictions.
(6 marks)
QUESTION 23
May 2018 Question Two C
Analyse three roles of International Monetary Fund (IMF) to member countries.
(6 marks)

QUESTION 24
November 2017 Question Five B
Explain five advantages of implementing exports promotion strategy in developing countries. (5 marks)

QUESTION 25
May 2017 Question Six A
Argue the case for and against regional economic integration by developing countries.
(12 marks)
QUESTION 26
May 2017 Question Seven A
Describe five causes of balance of payment deficits in developing countries. (5 marks)

QUESTION 27
May 2017 Question Seven B
Outline six limitations of the theory of comparative advantage. (6 marks)

QUESTION 28
November 2016 Question Five A
The United Kingdom (UK) recently withdrew its membership from the European Union (EU), a process that was referred to as “Brexit”. Analyse the likely economic effect of Brexit” on the United Kingdom’s:

(i) Exchange rates. (2 marks)
(ii) Interest rates. (2 marks)
(iii) Inflation rate. (2 marks)
(iv) Securities exchange market. (2 marks)

QUESTION 29
May 2016 Question Six A
Explain the term “balance of payments” as used in international trade. (2 marks)

QUESTION 30
September 2015 Question Six A
Most developing countries experience deficits in their balance of payments.
Explain the various methods that could be used by these countries to correct deficits in their balance of payments. (10 marks)

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