CAIE A-Level Economics 11.5.2 Trade and Investment

CAIE A-Level Economics 11.5.2 Trade and Investment
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise explaining how market access, subsidy removal and cross-border investment can support development and evaluating long-run gains and costs for both trading partners.

How this is tested

  • explain trade not aid as greater access for developing-country exports to developed markets
  • analyse how infrastructure investment can raise AD, productive capacity, exports and employment
  • evaluate long-run trade and investment using gains, debt, capacity, market access and partner costs

Question 30

[Maximum number: 1]

Globalisation means that goods and services, capital and labour are traded on a worldwide basis.
Which combination illustrates that each trade partner can benefit when a low-income country trades with a high-income country?

the low-income country

the high-income country

contracts are not always fulfilled
due to corrupt practices

agrees to increase investment in
the infrastructure of low-income
countries

experiences liquidity problems
that restrict investment

transfers short-term government
loans repayable at high interest
rates

multinational companies
repatriate profits from mining
of rare minerals for export

receives supplies at high prices
from multinationals to meet
excess demands for rare metals

supplies seasonal labour to
overcome shortages for
picking fruit crops

repatriates wages to families
of seasonal workers