Theme 4 Application

Question 1

Absolute Advantage

Answer 1

In 2024, Saudi Arabia produced 10.2mn barrels of oil per day

Question 2

Comparative Advantage

Answer 2

India’s garment industry makes up 83% of its total exports

Question 3

Containerisation

Answer 3

The costs of shipping have fallen virtually 100% since the 1950s

Question 4

GDP / HDI difference

Answer 4

China 2nd highest GDP but 86th in HDI.

Question 5

Impact of Emerging Economies

Answer 5

BRICS imported and exported $3.5tn in 2014 alone

Question 6

Common Market

Answer 6

European Single Market

Question 7

Customs Union

Answer 7

European Union

Question 8

Quota

Answer 8

The US limits the volume of Canadian beef to 199,000 tons a year

Question 9

Monetary Union

Answer 9

Eurozone

Question 10

Tariff

Answer 10

Trump has threatened to impose 25% tariffs on EU goods

Question 11

Trade war impacts

Answer 11

300,000 jobs were lost due to the China-US trade war in 2018

Question 12

Non-Tariff Barriers

Answer 12

Many US pharmaceutical companies have patents and copyright protection

Question 13

Protectionist Subsidy

Answer 13

The UK govt giving Rolls Royce £210M to develop aeronautical sectors and become more globally competitive.

Question 14

Tariff / Trade War

Answer 14

Canada’s new president Mark Carney “vows” to win trade war with Trump through retaliatory tariffs on American goods.

Question 15

Dumping

Answer 15

EU imported electric cars worth €11bn from China, 49% of its total electric car imports

Question 16

Overdependence

Answer 16

Saudi Arabia’s oil exports make up 50% of their GDP

Question 17

Tax Evasion (TNCs)

Answer 17

Italy has just accused
Amazon of evading
€1.2bn in VAT payments

Question 18

External Shocks

Answer 18

The Russian invasion led to 13.9% inflation in Ukraine and decline in GDP by over 28%

Question 19

Fixed Exchange Rate

Answer 19

Hong Kong Dollar pegged to US dollar at a rate of HK$7.80 to US$1

Question 20

Floating Exchange Rate

Answer 20

US Dollar $

Question 21

Benefit of Brexit

Answer 21

The UK paid £15.8Bn in 2018 to the EU budget which can now be spent on the NHS / SSPs

EV: Paid £39.8Bn in interest payments in 2018

Question 22

Managed Exchange Rate

Answer 22

Chinese Yuan

Question 23

Competitive Devaluation

Answer 23

Bank of Japan kept interest rates negative (-0.1%) to depreciate the Yen and boost exports.

Question 24

Cost of Brexit

Answer 24

GDP is estimated 6% lower than if we stayed in the EU

Question 25

Role of the IMF

Answer 25

IMF provided $240Bn in bailout aid to Greece in exchange for austerity measures after their financial crisis.

Question 26

Role of World Bank

Answer 26

Gave out $61 Billion in aid in 2016

Question 27

Role of WTO

Answer 27

Trade Tariffs would be 32% higher without the WTo

Question 28

Market Rigging

Answer 28

97 congressmen found to be insider trading in 2022

Question 29

Primary Product Dependency

Answer 29

Rwanda's primary exports are gold, coffee and tea (66% of exports)

Question 30

Savings Gap

Answer 30

India’s national savings rate stands at 30% of GDP but investment rate is 35% of GDP

Question 31

Foreign Currency Gap

Answer 31

Argentina’s foreign currency gap was estimated at $10bn in 2024

Question 32

Capital Flight

Answer 32

$2.5bn left Venezuela in one quarter alone due to hyperinflation and political instability

Question 33

Debt

Answer 33

Japan's debt is 270% of GDP

Question 34

Poor infrastructure

Answer 34

Haiti - EQ in 2010 worsened by poor housing, sewage system etc.

Question 35

Weak Property Rights

Answer 35

There is over $9.3Tn of dead capital in the world.

Question 36

Poor education

Answer 36

Only 40% of children in SSA complete secondary education

Question 37

Tourism for development

Answer 37

Macau is the only place in China where Gambling is allowed thus attracting tourism and significantly developing the area.

Question 38

FDI for development

Answer 38

India attracted $84Bn in FDI in 2024

Question 39

Fairtrade for development

Answer 39

Rwanda pushing for fairtrade for Coffee and Tea farmers considering its their main export.

Question 40

Infrastructure development

Answer 40

China's Belt and Road initative - $4T in 140 countries. Ports, airports, railways in developing countries.

Question 41

Aid for development

Answer 41

Lesotho - 25% of 16-50 year olds have Aids / HIV. Global Fund comitted billions to SSA to reduce HIV infections.

Question 42

Debt Relief for development

Answer 42

Mozambique recieved $4.5Bn in debt relief in 2024

Question 43

Highest GINI and Lowest GINI

Answer 43

South Africa - 0.63 Iceland - 0.25

Question 44

Critique of Aid?

Answer 44

Dead - Aid /// Dambisa Moyo. Increase in foreign aid to Africa does not help to cause economic growth because it makes these countries lazy / dependent and fosters corruption.

Question 45

Tax Haven losses stat

Answer 45

It is suggested that for every £1 gained in extra taxes by Luxemburg (Tax haven), other countries are collectively losing possibly £1000 in tax revenues.

Question 46

Rwanda Case Study

Answer 46

HDI - 157th LE - 60 15% unemployment 46 GINI coefficient 50% of exports are coffee / tea (PP dependency) Overcoming this through Tourism - Arsenal, PSG, Bayern - VISIT RWANDA - 1.6Mn tourists a year Savings gap - 8.9% of GDP Low FDI - 4.5% of GDP V high electricty cost (25p per kilowat hour)