Economics 9708 · AS & A Level · International trade and free trade

International trade and free trade — practice question

Globalisation refers to the exchange of goods and services, capital and labour across the world. Which combination shows that both trade partners may benefit when a low-income country trades with a high-income country?

  • Athe low-income country: contracts are not always fulfilled due to corrupt practices; the high-income country: agrees to increase investment in the infrastructure of low-income countries
  • Bthe low-income country: experiences liquidity problems that restrict investment; the high-income country: transfers short-term government loans repayable at high interest rates
  • Cthe low-income country: multinational companies repatriate profits from mining of rare minerals for export; the high-income country: receives supplies at high prices from multinationals to meet excess demands for rare metals
  • Dthe low-income country: supplies seasonal labour to overcome shortages for picking fruit crops; the high-income country: repatriates wages to families of seasonal workers

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