Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
Botswana combines capital goods with labour in its diamond-mining sector. From 2015 to 2019, its average economic growth rate stood at 3.8%, whereas the world average was 2.8%. During this period, the country had low inflation and moved away from protectionism towards free international trade.
(a)[2]
Define, with an example, a capital good.
(b)[4]
Explain two reasons why a low inflation rate may increase a country's economic growth rate.
(c)[6]
Analyse how a government could reduce protectionism and move towards free international trade.
(d)[8]
Discuss whether a country would, or would not, gain from diamond mining.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A man-made item employed to produce another good or service / a human-made item used in production” …