DP Economics Questionbank

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

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

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.

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]).

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

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

List two components of the Human Development Index (HDI) (paragraph [2]).

Using information from the text/data and your knowledge of economics, evaluate the challenges to economic growth and economic development faced by Burundi.

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

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

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

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. 

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

Using information from the text/data and your knowledge of economics, examine the extent to which access to credit and appropriate technology can contribute to economic development in Kenya.

State two functions of the WTO.

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

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.

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

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

Define the term concessional long-term loans indicated in bold in the text (paragraph [2]).

Explain two possible disadvantages for Bhutan in receiving India’s tied aid (paragraph [3]).

Using information from the text/data and your knowledge of economics, evaluate the government policies being used to promote economic development in Bhutan.

Define the term foreign direct investment (FDI) indicated in bold in the text (paragraph [4]).

Explain two reasons why Chinese companies may have been attracted into Peru (paragraph [4]).

Using a poverty cycle diagram, explain how increased foreign direct investment might break the cycle (paragraph [4]).

Using information from the text/data and your knowledge of economics, evaluate the factors that may allow Peru to continue to achieve high rates of economic growth in the future.

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

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

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

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

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

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

Describe the nature of foreign direct investment (paragraph [6]).

Using information from the text, explain two reasons why Chinese multinational corporations (MNCs) are investing in Bolivia.

Using information from the text/data and your knowledge of economics, discuss the possible effects of Chinese involvement on economic growth and development in the Bolivian economy. 

Explain the difference between economic growth and economic development (paragraph [7]).

Using information from the text/data and your knowledge of economics, discuss the extent to which continued economic growth may lead to economic development in Kenya.

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

Figure 4

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

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

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

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

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

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

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

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, 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]).

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.

State two functions of the International Monetary Fund (IMF) (paragraph [1]).

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

Using an AD/AS diagram, explain how Turkey’s reliance on energy imports is putting “further pressure on inflation” (paragraph [4]).

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

Using information from the text/data and your knowledge of economics, compare and contrast the level of economic development in Ghana and Nigeria.

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

Using information from the text/data and your knowledge of economics, evaluate export promotion as a strategy for achieving economic development in Cambodia.

The data in Table 2 suggest that Country B may have attracted significant foreign direct investment (FDI).

Outline one possible disadvantage of foreign direct investment (FDI) for economically less developed countries.

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.

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

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

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

Plot and label the new supply curve on Figure 2.

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

State two functions of the International Monetary Fund (IMF) (paragraph [2]).

Define the term human capital indicated in bold in the text (paragraph [5]).

Using a poverty cycle diagram, explain how the government of Pakistan could intervene to “break out of the poverty cycle” (paragraph [3]).

Using information from the text/data and your knowledge of economics, evaluate the potential impact of the IMF and the World Bank on economic development in Pakistan.

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

Using information from the text/data and your knowledge of economics, evaluate the use of export promotion as a means of achieving economic development in the Philippines.

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

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]).

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.

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

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

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, evaluate the view that free trade is beneficial to Japan’s economy.

Using information from the text/data and your knowledge of economics, discuss the role of aid in achieving economic development in STP.

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

Using information from the text/data and your knowledge of economics, discuss the view that government intervention is the best way to achieve economic development in Fiji.

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

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

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

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.

Using information from the text/data and your knowledge of economics, evaluate the effectiveness of market-oriented policies in achieving economic development in Angola.

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

Using information from the text/data and your knowledge of economics, evaluate the role of foreign direct investment in promoting economic development in Laos.

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

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

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]).

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

List two components of the Human Development Index (HDI) (paragraph [1]).

Using information from the text/data and your knowledge of economics, evaluate the effectiveness of interventionist policies as a means of achieving economic development in the DRC.

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

Using information from the text/data and your knowledge of economics, contrast the potential for economic development in Guatemala and Honduras.

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

List two functions of the World Trade Organization (WTO) (paragraph [2]).

Using a tariff diagram, explain the likely effect on consumer surplus of a 25 % tariff on all wooden furniture imported into the US (paragraph [5]).

Using a foreign exchange diagram, explain the possible effect of China’s large current account surplus in 2007 on the exchange rate of China’s currency (the renminbi) (paragraph [6]).

Using information from the text/data and your knowledge of economics, evaluate China’s use of subsidies as a form of trade protection.

List two responsibilities of a central bank (paragraph [4]).

Using an exchange rate diagram, explain the effect on the South Korean won’s exchange rate of South Korea’s central bank selling US dollars (paragraph [6]).

Using information from the text/data and your knowledge of economics, evaluate the South Korean central bank’s decision to intervene in order to prevent the South Korean won from depreciating again.

List two functions of the World Bank (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the extent to which foreign aid from the US may assist economic development in Honduras.

Using information from the text/data and your knowledge of economics, evaluate the impact on economic development of the Tanzanian government’s policy of spending on infrastructure projects. 

Define the term current account surplus indicated in bold in the text (paragraph [7]).

Using an exchange rate diagram, explain how a decrease in the interest rate might influence the value of the Thai baht (paragraph [6]).

Using information from the text/data and your knowledge of economics, evaluate the implications of the strong Thai baht on Thailand’s economy.

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

State two functions of the World Trade Organization (WTO) (paragraph [6]).

Using a demand and supply diagram for processed food, explain how the EU’s tariff on palm oil might impact the market for processed food in the EU (paragraph [5]).

Using a production possibilities curve (PPC) diagram to illustrate comparative advantage, explain why the EU would export cars to Indonesia and Indonesia would export clothing to the EU (paragraph [2]).

Using information from the text/data and your knowledge of economics, discuss the economic effects on Indonesia of establishing a free trade agreement with the EU.

Define the term foreign direct investment indicated in bold in the text (paragraph [3]).

Using information from the text/data and your knowledge of economics, discuss the effectiveness of foreign aid in achieving economic development in Vanuatu.

Define the term multinational corporations indicated in bold in the text (paragraph [5]).

Define the term green GDP indicated in bold in the text (paragraph [7]).

Using information from the text/data and your knowledge of economics, evaluate the impact of market-oriented policies on economic development in Brazil.

State one example of a debit item from the financial account of the balance of payments.

Using Table 5, calculate the value of net current transfers for Laylaland in 2020.

Using Table 5, calculate the net exports of goods and services for Laylaland in 2020.

Calculate the change in consumer expenditure on imported chia seeds in Nofiberland resulting from the imposition of the tariff.

Calculate the total welfare loss resulting from the imposition of the tariff on chia seeds.

Explain how the increase in world demand for quinoa would likely affect the current account balance of Proteinland.

Using real-world examples, discuss the consequences of a fall in a country’s exchange rate.

Using real-world examples, discuss the possible implications of a persistent current account deficit.

Explain how political and social factors can act as barriers to economic growth and economic development.

Countries often specialize and trade according to the theory of comparative advantage. Explain the limitations of this approach.

Using real-world examples, discuss the advantages and disadvantages for a country of being a member of a trading bloc. 

Using real-world examples, discuss the significance of economic barriers for a country’s economic growth and economic development.

Define the term foreign direct investment (FDI) indicated in bold in the text (Text A, paragraph [3]).

Using an exchange rate diagram, explain how the central bank of North Macedonia is preventing an appreciation of the denar against the euro (Text B, paragraph [4]).

Using an international trade diagram, explain the likely impact of the removal of import quotas on North Macedonia’s production of wine (Text C).

Using information from Text A, paragraph [4], calculate North Macedonia’s balance of trade in 2018.

Using information from the texts/data and your knowledge of economics, discuss the likely economic effects on North Macedonia of its entry into the European Union (EU) Common Market.

List two dimensions of the Inequality adjusted Human Development Index (IHDI) (Text D, paragraph [3]).

Using the information in Table 3, calculate the change in Sierra Leone’s current account balance from 2017 to 2018.

Using an exchange rate diagram, explain how the fall in export revenue contributed to the depreciation of the leone (Text D, paragraph [4]).

Using a poverty cycle diagram, explain how the provision of free primary and secondary education may help households break the poverty cycle (Text E, paragraph [2]).

Using information from the texts/data and your knowledge of economics, evaluate the impact of government intervention in promoting economic growth and economic development in Sierra Leone.

Using a production possibilities curve (PPC) diagram to show comparative advantage, explain why Vietnam would export seafood to Japan while Japan would export machinery to Vietnam (Text B, paragraph [1]).

Using information from Table 1, calculate the change in the surplus on Vietnam’s balance of trade in goods with Japan between 2015 and 2019.

Using an exchange rate diagram, explain how the central bank in Vietnam could prevent the dong from depreciating by using its reserve assets (Text C, paragraph [2]).

Define the term tariffs indicated in bold in the text (Text D, paragraph [5]).

List two of the Sustainable Development Goals (Text D, paragraph [1]).

Using a poverty cycle diagram, explain how an increase in funds for the education of teenage girls could break the poverty cycle (Text D, paragraph [2]).

Using information from the texts/data and your knowledge of economics, discuss the view that trade with Japan is more beneficial for Vietnam’s economic development than foreign direct investment (FDI) from Japan.

Explain why dependence on primary sector production may be considered a barrier to economic development.

Using an exchange rate diagram, explain how a reduction in the current account deficit could affect the exchange rate for the kwacha (Text D, paragraph [5]).

Using the information in Figure 1, calculate the change in the value of Burundi’s gold exports resulting from the increase in the price of gold from US$1500 per oz to US$1800 per oz.