(a)[3]
- Describe the movement in New Zealand’s terms of trade from June 2011 to September 2012. [1]
- With reference to Fig. 1, explain the change that you have described. [2]
(b)[4]
- Using the information in Extract 1, calculate the price elasticity of demand for New Zealand meat from June to September 2012, assuming all other factors were unchanged. [2]
- Explain why receipts from meat exports increased despite the fall in the price of meat. [2]
(c)[3]
Using the information in the extracts, explain why New Zealand’s terms of trade were expected to ‘stabilise during 2013’.
(d)[4]
Use economic theory to explain why New Zealand specialises in exporting dairy products and meat and importing machinery and consumer goods.
(e)[6]
Discuss whether the rising deficit in New Zealand’s balance of trade would be expected, given the change in the terms of trade after June 2011.