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Edexcel IGCSE Economics 2.2 The global economy Question Bank

Practise global economy questions on globalisation, trade, protectionism, trade blocs, WTO roles, exchange rates and export data.

Syllabus
First assessment 2019
Course
Economics 4EC1

Covered syllabus points

2.2.1 Globalisation2.2.2 International trade2.2.3 Exchange rates

2.2 The global economy question 1

[Maximum number: 9]

Question (a)

(a)

The increased integration and interdependence of economies is known as

A

privatisation

B

specialisation

C

protectionism

D

globalisation

[ 1 ]

Question (b)

(b)

Rachel buys a t-shirt for 1000 Kenyan shillings (KES) when she is on holiday.
The exchange rate is £ 1=137.73 KES.

Calculate, to two decimal places, the price in sterling ( £ ) of Rachel's t-shirt. You are advised to show your working.

[ 2 ]

Question (c)

(c)

Using the diagram below, draw the effects of the introduction of a quota on the equilibrium price and quantity of a good.
Label the new curve, the new equilibrium price and new equilibrium quantity.

Figure 1

Figure 1

[ 3 ]

Question (d)

(d)

In 2017 the US government wanted to introduce a 300% tariff on imported aircraft made by Canadian manufacturer Bombardier.

Explain one way the World Trade Organisation could promote free trade between countries such as Canada and the US.

[ 3 ]

2.2 The global economy question 2

[Maximum number: 6]

Question (a)

(a)

Which one of the following is a role of the World Trade Organization (WTO)?

A

Writing off debts

B

Settling trade disputes

C

Increasing trade barriers

D

Paying subsidies to producers

[ 1 ]

Question (b)

(b)

Describe one advantage of free trade for consumers.

[ 2 ]

Question (c)

(c)

In May 2020, China introduced a tariff of 80\% on Australian barley.

Using the diagram below, draw the effects of the introduction of a tariff on the equilibrium price and quantity of Australian barley. Label the new curve, the new equilibrium price and new equilibrium quantity.

Figure 2

Figure 2

[ 3 ]

2.2 The global economy question 3

[Maximum number: 3]

Question (a)

(a)

Which one of the following is the most likely reason for increased globalisation?

A

Higher number of tariffs and quotas

B

Lower transportation costs

C

Reduced significance of multinational corporations

D

Increased communication costs

[ 1 ]

Question (b)

(b)

What is meant by the term trading bloc?

[ 2 ]
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