IGCSE Development Studies: Specimen Questions with Answers 22 - 23 of 98

Passage

Forms of Free Trade

Question 22 (7 of 7 Based on Passage)

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Free trade is good for nations?

Explanation

The Nations Which Can Benefit from Free Trade Are

  • The exporters with competitive advantage
  • The nations having workers who gain jobs in export industries.

  • Nation having net economic welfare gain for society

  • Consumers of nations who get benefits from cheaper prices.

  • Domestic firms who see higher demand from consumers who now have more disposable income due to cheaper imports.

  • The nation whose consumers see lower prices due to the competitive pressure of trade.

Passage

GNP data of South Africa is as follows:

  • South Africa GNP for was $ 0. 00B, a 100% decline from 2,019.
  • South Africa GNP for 2,019 was $ 353. 53B, a 6. 38% increase from 2,018.

  • South Africa GNP for 2,018 was $ 332. 32B, a 7. 74% increase from 2,017.

  • South Africa GNP for 2,017 was $ 308. 44B, a 0. 34% increase from 2,016.

Question 23 (1 of 6 Based on Passage)

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A) What are the components of GNP?

Explanation

A) Gross national product is the oldest concept of national income. It represents money value of all final goods and services produced including of course, net factor income abroad. It includes the value of final goods only and ignores the value of the intermediate goods such as raw materials.

Components of GNP are:

  • Consumer goods: It includes consumer goods produced by the private sector.
  • Private investment (I) : It includes inventory goods, producer goods produced in the private sector and construction of residential buildings

  • Goods and services produced by the government (G) : It includes both producer goods and consumer goods produced by the government.

  • Net income from abroad (E) : It can be both positive and negative