Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
Australia contains a range of firms that carry out business in other countries. These multinational companies (MNCs) offer a number of advantages to Australia, their home country. The Australian Government applies relatively low import tariffs, and the country operates a floating exchange rate. In recent years, Australia has seen more investment and a higher Human Development Index (HDI) value.
(a)[2]
Identify two separate benefits that an MNC may provide to its home country.
(b)[4]
Explain two drawbacks of import tariffs.
(c)[6]
Analyse how a higher level of investment can lead to a rise in a country’s HDI value.
(d)[8]
Discuss whether having a floating exchange rate is beneficial for an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Profits together with increased exports” …