EDEXCEL A-LEVEL ECONOMICS B THEME 3
EXAM QUESTIONS AND ANSWERS 100%
CORRECT AND UPDATED!
,Globalisation - ANSWER The process in which national economies have become
increasingly integrated and interdependant
Causes of globalisation (5) - ANSWER Trade liberalisation
Trading blocs
Growth of MNCs
Technological advances
Greater mobility of labour and capital
Advantages of globalisation (5) - ANSWER Lower prices
Benefits of trade
Greater employment
Large economies of scale
Free movement of labour and captial
Disadvantages of globalisation (6) - ANSWER Growing inequality
Higher structural unemployment
Environmental costs
Trade imbalances
Risk of external shocks
Less cultural diversity
Absolute advantage - ANSWER When a country can produce a product using fewer
factors of production than another nation
Comparative advantage - ANSWER A country should specialise in the goods and
services it can produce at the lowest opportunity cost, and then trade with another
country
Specialisation - ANSWER When a worker, firm, region or country produces a narrow
range of goods and services
Advantages of specialisation (5) - ANSWER Larger range of goods and services
Greater output
Greater quality
Benefits of trade
Reduces problem of scarcity
Disadvantages of specialisation (5) - ANSWER Finite resources
Over-reliance on weather
, Changing tastes/fashions
Interdependence
De-industrialisation
Factors influencing the terms of trade (long run) - ANSWER Incomes
Productivity
Technology
Trading bloc - ANSWER A group of countries that join together and agree to increase
trade between themselves
Free trade area - ANSWER No trade barriers
Can trade with other countries
Customs union - ANSWER No trade barriers
Common external barrier
Common market - ANSWER No trade barriers
Common external barrier
Free movement of labour and capital
Monetary union - ANSWER No trade barriers
Common external barrier
Free movement of labour and capital
Common currency and central bank
World Trade Organisation (WTO) - ANSWER International organisation that regulates
world trade
WTO's ideal world trade (5) - ANSWER Non-discriminatory
Free from barriers/protectionism
Predictable
Promotes fair competition
Beneficial for developing countries
Role of WTO (7) - ANSWER Set and enforce rules of international trade
Resolve trade disputes
Provide a forum for negotiating trade liberalisation
To monitor further trade liberalisation
Increase transparency of decision making process
Help developing countries benefit
EXAM QUESTIONS AND ANSWERS 100%
CORRECT AND UPDATED!
,Globalisation - ANSWER The process in which national economies have become
increasingly integrated and interdependant
Causes of globalisation (5) - ANSWER Trade liberalisation
Trading blocs
Growth of MNCs
Technological advances
Greater mobility of labour and capital
Advantages of globalisation (5) - ANSWER Lower prices
Benefits of trade
Greater employment
Large economies of scale
Free movement of labour and captial
Disadvantages of globalisation (6) - ANSWER Growing inequality
Higher structural unemployment
Environmental costs
Trade imbalances
Risk of external shocks
Less cultural diversity
Absolute advantage - ANSWER When a country can produce a product using fewer
factors of production than another nation
Comparative advantage - ANSWER A country should specialise in the goods and
services it can produce at the lowest opportunity cost, and then trade with another
country
Specialisation - ANSWER When a worker, firm, region or country produces a narrow
range of goods and services
Advantages of specialisation (5) - ANSWER Larger range of goods and services
Greater output
Greater quality
Benefits of trade
Reduces problem of scarcity
Disadvantages of specialisation (5) - ANSWER Finite resources
Over-reliance on weather
, Changing tastes/fashions
Interdependence
De-industrialisation
Factors influencing the terms of trade (long run) - ANSWER Incomes
Productivity
Technology
Trading bloc - ANSWER A group of countries that join together and agree to increase
trade between themselves
Free trade area - ANSWER No trade barriers
Can trade with other countries
Customs union - ANSWER No trade barriers
Common external barrier
Common market - ANSWER No trade barriers
Common external barrier
Free movement of labour and capital
Monetary union - ANSWER No trade barriers
Common external barrier
Free movement of labour and capital
Common currency and central bank
World Trade Organisation (WTO) - ANSWER International organisation that regulates
world trade
WTO's ideal world trade (5) - ANSWER Non-discriminatory
Free from barriers/protectionism
Predictable
Promotes fair competition
Beneficial for developing countries
Role of WTO (7) - ANSWER Set and enforce rules of international trade
Resolve trade disputes
Provide a forum for negotiating trade liberalisation
To monitor further trade liberalisation
Increase transparency of decision making process
Help developing countries benefit
