Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
In 2016, the steel market had a worldwide surplus, which drove steel prices down. That prompted calls for protectionist measures from other steel producers, including those in the EU and the USA. Car producers did not support such measures, because about 22% of a car manufacturer’s costs are linked to steel prices.
(a)[2]
State the meaning of protectionism.
(b)[4]
Explain two trade protection methods.
(c)[6]
Analyse, using a demand and supply diagram, how falling steel prices affect the car market.
(d)[8]
Discuss whether protectionism does or does not raise living standards.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A deliberate effort to restrict imports or encourage exports / make foreign products less competitive” …