By applying supply-side policy measures, such as deregulation, China is being shifted nearer to a market economic system. Certain supply-side policies, including education and subsidies, may also lift a country’s economic growth rate. China became a member of the World Trade Organisation in 2001 and has afterwards removed some import quotas and cut some import tariffs. These actions could affect the size of its current account surplus.
(a)[2]
Define what is meant by deregulation.
(b)[4]
Explain two ways in which consumers may benefit from a market economic system.
(c)[6]
Analyse how education and subsidies may raise a country’s economic growth rate.
(d)[8]
Discuss whether or not reducing a country’s trade protection will reduce its current account surplus.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The removal of rules/regulation” …