Older MCQs might not have the typical A, B, C,
D
choices. They
have choices 1, 2, 3, and a combination of them is the answer. Below is the key that maps such
combinations to the answer.
A
1, 2 and 3 are correct
B
1 and 2 only are correct
C
2 and 3 only are correct
D
1 only is correct
The components of the current account of the balance of payments – trade in goods, trade in services, primary income and secondary income. Calculation of deficits and surpluses on the current account of the balance of payments and its component sections. Causes of current account deficit and surplus. Consequences of current account deficit and surplus: Impact on GDP, employment, inflation and foreign exchange rate. Policies to achieve balance of payments stability: The range of policies available to achieve balance of payments stability and how effective they might be.
The implications of misallocation of resources in respect of the over consumption of demerit goods and goods with external costs, and the under consumption of merit goods and goods with external benefits.
Definition of globalisation. Role of multinational companies (MNCs) and the costs and benefits to their host and home countries. The benefits of free trade for consumers, producers and the economy in a variety of countries. Methods of protection: Tariffs, import quotas, subsidies and embargoes. Reasons for protection including infant industry, declining industry, strategic industry and avoidance of dumping. Consequences of protection: Effectiveness of protection and its impact on the home country and its trading partners.
