Practise evaluating how aid, trade, FDI, MNCs, debt, globalisation and international institutions affect growth, external accounts and living standards in developing economies.
Between 2010 and 2020, very low interest rates encouraged low-income countries to borrow money from foreign investors and governments to finance long-term economic growth.
Evaluate this approach to promoting long-term economic growth.
The United Nations gives aid to a developing country so it can purchase vaccinations manufactured in India.
How is this aid characterised?
characteristic 1
characteristic 2
bilateral
tied
bilateral
untied
multilateral
tied
multilateral
untied
Which statement describes a multinational company (MNC)?
A firm that avoids paying indirect taxes.
A firm that conducts operations in different countries.
A firm that experiences diseconomies of scale at low levels of output.
A firm that trades internationally.
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
Which criticism of foreign direct investment (FDI) is least valid?
It encourages competition, reduces prices and forces the less efficient domestic firms to leave the market.
It brings workers from its own country and provides only low paying jobs to low skilled local workers.
It is usually withdrawn quickly in case of a global crisis, making developing countries more vulnerable to global shocks.
Its actions often result in environmental degradation, and over exploitation of natural resources.
