DP Economics Questionbank

Using Figure 7, identify the equilibrium quantity being consumed following the imposition of the tariff.

Calculate the value of the Mexican peso (US$ per MX$) in 2015. Enter your result in Table 3.

Using Figure 7, calculate the change in consumer surplus as a result of Country B imposing the tariff.

Using Table 3, state one possible effect on Mexican consumers and one possible effect on Mexican producers from the change in the value of the Mexican peso (US$ per MX$) between 2014 and 2016.

Using Figure 6, identify the equilibrium price when Country B engages in free trade.

Using information from Figure 5, sketch an exchange rate diagram to show how the change in Mexico’s spending on imports in 2010 would have affected its exchange rate (US$ per MX$), ceteris paribus.

Using Figure 6, calculate the consumer surplus and the producer surplus when Country B engages in free trade.

Plot and label the production possibility curves for Country J and for Country H, assuming constant opportunity costs, on Figure 4.

Using Figure 7, calculate the welfare loss as a result of Country B imposing the tariff.

Define the term free trade area indicated in bold in the text (paragraph [1]).

Using Figure 7, calculate the revenue received by the government as a result of the imposition of the tariff in Country B.

Using an international trade diagram, explain the outcome on US producers of the introduction of a tariff on imports from China (paragraph [2]).

Using an exchange rate diagram, explain how South Korea’s current account surplus could have “helped increase the South Korean won’s value” (paragraph [2]).

Define the term tariff indicated in bold in the text (paragraph [2]).

Define the term trade war indicated in bold in the text (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the arguments for and against the trade protection measures imposed by the US on China.

List two components of the financial account (paragraph [4]).

Using price elasticity of demand (PED) data from the text and the J-curve effect, explain the most likely impact of “the falling value of the Australian dollar” on Australia’s current account (paragraph [4]).

Using an international trade diagram, explain how “increased quotas for the export of rice to Japan” will affect the price of rice in Japan (paragraph [2]).

Using information from the text/data and your knowledge of economics, discuss the possible implications on South Korea’s economy of a current account surplus.

State two functions of the World Trade Organization (WTO) (paragraph [1]).

Using information from the text/data and your knowledge of economics, evaluate the view that free trade is beneficial to Japan’s economy.

Using an exchange rate diagram, explain how raising interest rates would “stop the fall in the peso’s value” (paragraph [4]).

Define the term absolute advantage indicated in bold in the text (paragraph [3]).

Define the term quotas indicated in bold in the text (paragraph [2]).

Using an AD/AS diagram, explain how the peso’s weakness is “raising inflation” (paragraph [6]).

Using an exchange rate diagram, explain how the increase in the official interest rate to 3.5 % is likely to affect the value of the New Zealand dollar (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the possible economic consequences of an overvalued New Zealand dollar on the New Zealand economy.

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using information from the text/data and your knowledge of economics, discuss the view that the US should impose tariffs on the imported shrimp.

Using an exchange rate diagram, explain how the large current account deficit may have affected the value of the Ghanaian cedi.

Using an AD/AS diagram, explain how the falling value of the Ghanaian cedi may have contributed to inflation.

With reference to the diagram, explain why the welfare loss from the imposition of the quota is likely to be greater than the welfare loss resulting from a tariff of $2 per kg.

Identify the quantity of bananas which would be purchased in Country A per month following the imposition of the quota.

Assume that the dollar/yen exchange rate is in equilibrium. Using the functions, calculate the cost, in dollars, of a motorbike which costs ¥552 640.

Calculate the current account balance from the data given in Table 1.

Calculate the change in revenue earned by domestic producers of bananas in Country A as a result of the quota.

Using examples from Table 1, outline the difference between debit items and credit items in the balance of payments.

Explain two implications of a rising current account surplus.

Using an international trade diagram, explain how US tariffs could affect the export of Chinese steel and aluminium to the US (paragraph [2]).

Define the term trade war indicated in bold in the text (paragraph [1])

Using a demand and supply diagram, explain how reduced tariffs on “imported factors of production” would affect the price of Chinese goods (paragraph [7]).

Using information from the text/data and your knowledge of economics, evaluate the impacts of free trade measures on China’s economy.

Define the term current account indicated in bold in the text (paragraph [1]).

Define the term depreciation indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain how higher interest rates could “protect the rupee from further depreciation” (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the possible economic consequences on the Indian economy of a depreciating rupee.

State two functions of the World Trade Organization (WTO) (paragraph [1]).

Using an AD/AS diagram, explain how removing “the import quota will reduce the inflation rate in the Philippines” (paragraph [5]).

Using information from the text/data and your knowledge of economics, discuss the view that a depreciating currency is good for the Chinese economy.

Using information from the text/data and your knowledge of economics, evaluate the impact on the economy in the Philippines of removing the rice quota.

Define the term fixed exchange rate indicated in bold in the text (paragraph [1]).

Using an exchange rate diagram, explain why the “widening trade deficit in services” could lead to a depreciation of the renminbi (paragraph [3]).

Define the term free trade indicated in bold in the text (paragraph [1]).

Define the term tariff indicated in bold in the text (paragraph 2).

Define the term current account indicated in bold in the text (paragraph 1).

Define the term current account deficit indicated in bold in the text (paragraph 1).

Using an international trade diagram, explain the impact on the Kenyan government of implementing a tariff on steel imports.

Using information from the text/data and your knowledge of economics, evaluate the claim that trade protection measures will support economic growth in Kenya.

Define the term depreciation indicated in bold in the text (paragraph 1).

Using an exchange rate diagram, explain why “slowing growth in China” may have caused a depreciation of the Australian dollar (paragraph 1).

Using information from the text/data and your knowledge of economics, discuss the possible consequences for the Australian economy of the fall in the value of the Australian dollar.

Define the term customs union indicated in bold in the text (paragraph 6).

Using a definition of the terms of trade, explain the terms of trade change in Australia from 2011 to 2015 (Figure 1).

Using information from the text/data and your knowledge of economics, discuss the possible effects of the fall in Australia’s terms of trade on the Australian economy.

A new government in Alpha decides to abolish the price ceiling. Instead, it opens the rice market to imports. The world supply of rice is perfectly elastic; any quantity can be bought for $3 per kilogram.

Using the diagram, calculate the import expenditures on rice.

State one way in which the government of Alpha might bring about a depreciation of its currency.

Using an AD/AS diagram, explain how the falling value of the Zambian kwacha (Zambia’s currency) is “feeding into inflation” (paragraph 6).

Define the term comparative advantage.

Explain two limitations of the theory of comparative advantage.

Alpha’s government decides to impose a $2 tariff on each kilogram of imported rice. Using the diagram, calculate the government revenue that results from the imposition of the tariff.

Using the data in Table 1, calculate Alpha’s current account balance for 2016.

Outline how Alpha’s current account balance for 2016 is likely to affect the exchange rate of its currency.

Following the depreciation, it is observed that the current account balance worsens initially, but improves after a certain period of time. Explain why this might be expected to happen.

Using your answers to part (g)(i), explain how the change in Buranda’s terms of trade may act as a barrier to economic development.

Calculate Buranda’s terms of trade index for 2008 and 2018.

Using the information in Table 5, calculate the financial account balance.

Using the diagram, calculate the opportunity cost of producing one tonne of bananas in Country A.

Calculate the value of V (exports of services) for Urbania in 2017.

Using your answer to part (g)(i), calculate the value of W (reserve assets) in Table 5.

Using your answer to part (g)(ii), describe how the level of reserve assets in Urbania changed by the end of 2017.

Explain how a depreciation of the Urbanian dollar ($) might result in a J-curve effect.

Using information from the text/data and your knowledge of economics, evaluate the likely impact on South Sudan of its membership of the EAC common market. 

Using an exchange rate diagram, explain how “the need to import corn” will affect the value of the South African rand (paragraph [3]).

Explain why “deteriorating terms of trade have resulted in a worsening of the current account” in South Sudan (paragraph [4]).

Define the term monetary union indicated in bold in the text (paragraph [1]).

Using a cost diagram, explain how membership in the common market may allow producers in South Sudan to gain economies of scale (paragraph [6]).

Define the term comparative advantage indicated in bold in the text (paragraph [5]).

Using information from the text/data and your knowledge of economics, evaluate the economic impacts of trade protection in the South African corn market.

Define the term depreciation indicated in bold in the text (paragraph [6]).

Define the term current account indicated in bold in the text (paragraph [6]).

Plot and label the world cotton supply curve that San Marcus now faces on Figure 3.

State two functions of the WTO.

With reference to your answer to question (b)(ii), calculate the change in the cost of financing the $8 per kg subsidy to the government of San Marcus following the decision to import cotton from the world market.

Outline the reason why Country X should specialize in the production of apples and Country Y should specialize in the production of bananas.

Using information from the text/data and your knowledge of economics, evaluate the effect of the tariff on drywall on different stakeholders.

Using a tariff diagram, explain the effect of the “preliminary tariffs” on Canadian consumers of drywall (paragraph [3]).

State one administrative barrier that Country Z could use in order to restrict imports.

Using a demand and supply diagram, explain how the “imposition of the preliminary tariff” may have affected the market for new homes built in Canada (paragraph [4]).

Explain the difference between a current account deficit and a budget deficit (paragraph [5]).

Using an exchange rate diagram, explain how the central bank might depreciate the value of the rupee (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the effects of the increasing current account deficit on Pakistan’s economy.

Explain two reasons why a government might prefer a floating exchange rate system for its currency.

Calculate the quantity of EU€ she will receive for her US$300 000.

Define the term dumping indicated in bold in the text (paragraph [2]).

Using an international trade diagram, explain the effect of a tariff on the imports of tinplate steel (paragraph [1]).

Using a supply and demand diagram and data from the text, explain how a “disequilibrium in the domestic US tinplate steel market” would occur if there were no imports (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss possible economic impacts of the tariff on tinplate steel.

Sketch and label a diagram to illustrate comparative advantage between Country X and Country Y on Figure 4.

Figure 4

Explain two possible economic consequences for the eurozone if the euro appreciates.

Calculate, in US$, the loss made by Tanya as a result of these transactions.

Determine the size of Gardia’s current account surplus/deficit when the sum of the financial and capital accounts is US$ 2 billion.

Using information from the text/data and your knowledge of economics, evaluate the possible consequences of the trade agreement between Japan and the EU (JEEPA).

Define the term current account deficit indicated in bold in the text (paragraph [4]).

Using an exchange rate diagram, explain one reason for the appreciation of the Canadian dollar (paragraph [3]).

Define the term quota indicated in bold in the text (paragraph [4]).

Calculate the equilibrium exchange rate for the US$ in terms of the gamma.

State two reasons that could have caused an increase in the supply of US$.

If a visitor to Gardia from the US buys a towel that costs 23 gamma, calculate the cost in US$.

State two factors that could cause Gardia’s current account to be in deficit, even though its balance of trade in goods is in surplus.

Using an international trade diagram, explain the likely impact of Japan “removing the current 30 % tariff” on the level of cheddar cheese imports. (paragraph [4]).

Using information from the text/data and your knowledge of economics, discuss the possible effects on the Canadian economy of the strengthening of the Canadian dollar against the US dollar.

Using information from the text/data and your knowledge of economics, discuss the implications of Turkey’s persistent current account deficit.

Calculate the additional cost of paying back the loan in gamma in 2019, due to the interest and the change in the exchange rate.

Using an exchange rate diagram, explain what is likely to have happened to the Turkish lira when Turkish citizens “bought US$1 billion worth of foreign currency” (paragraph [5]).

Using Figure 2, calculate how many US$ are needed to buy one gamma at the new exchange rate.

Define the term depreciation indicated in bold in the text (paragraph [3]).