Economics 2281 · O Level · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
The South Korean government believes that Japan is dumping steel. South Korean firms both trade in, and manufacture within, other countries. Some South Korean multinational companies (MNCs) argue that they help to reduce poverty in the countries where they operate. In 2019, South Korean firms were hit by a depreciation of South Korea’s foreign exchange rate. A number of firms also faced labour shortages, influenced by the country’s extremely low birth rate.
(a)[2]
Define the term dumping.
(b)[4]
Explain two reasons why a country’s foreign exchange rate might depreciate.
(c)[6]
Analyse how a MNC could help to reduce poverty in a host country.
(d)[8]
Discuss whether a very low birth rate would or would not be a cause for concern for a government.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A product is sold for less than cost price (1) in a foreign country (1).” …