IGCSE Development Studies: Specimen Questions with Answers 55 - 56 of 98

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Balance of Trade

Question 55 (5 of 7 Based on Passage)

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Name the products imported and exported by US

Explanation

Imports of US from China and Exports of US to China
Imports of US from ChinaExports of US to China
Telephone for cellular networks or for other wireless networksAero planes and other aircrafts
Automatic data processing machineSoya beans
Tricycle, scooters and similar wheeled toys and other toysVehicles with only spark ignition, internal combustion reciprocating piston engine
Communication apparatusElectronics, integrated circuits, processors, and controllers

Question 56 (6 of 7 Based on Passage)

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State the government՚s role in promoting trade.

Explanation

Government plays a solid role in promoting international trade. Importing same type of product for will pose a threat to domestic business. Government can influence trade through different measures-

  • Tariff: A tariff is a form of tax charged by the government to protect the domestic business from imports or foreign competition. Due to tariff domestic firms can charge higher prices for the goods and producing the output. Tariff leads to higher employment in the protected industries in comparison to the unprotected industries.
  • Quotas: Through quotas government restrict the quantity of imports from other nations. It is a method used by these government to protect the domestic industries from competition from foreign countries.

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