Economics 2281 · O Level · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
Australia contains several firms that carry on business in other countries. These multinational companies (MNCs) bring a range of advantages to their home country, Australia. The Australian Government sets relatively low import tariffs, and the country uses a floating exchange rate. Over recent years, Australia has seen more investment and a higher Human Development Index (HDI) figure.
(a)[2]
Identify two advantages that an MNC may bring to its home country.
(b)[4]
Explain two disadvantages that import tariffs create.
(c)[6]
Analyse how an increase in investment may lead to a rise in a country’s HDI value.
(d)[8]
Discuss whether a floating exchange rate is advantageous 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: “Export growth” …