Practise IB Economics HL 4.4.1 by explaining preferential trade agreements, their effects on trade flows and welfare, and their relationship to trade protection using marked exam evidence.
Study the extract and data below and answer the questions that follow.
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Define the term bilateral trade agreements indicated in bold in the text (paragraph (1)).
1 Vague definition.
The idea that it (any one of the following is sufficient):
- is essential facilities (capital) and services such as roads, airports, sewage treatment, water systems, railways, telephone and utilities
- reduces the cost / increases efficiency of economic activity
- is usually supplied by the government
- is necessary for economic activity.
2 Accurate definition.
An explanation that it (any two of the following is sufficient):
- is essential facilities (capital) and services such as roads, airports, sewage treatment, water systems, railways, telephone and utilities
- reduces the cost / increases efficiency of economic activity
- is usually supplied by the government
- is necessary for economic activity.