Questions and Answers
What is the impact of low savings rate on disposable income and imports?
Increases disposable income and increases imports
How does low productivity affect export competitiveness?
Increases unit labour costs and makes exports less competitive
What is the impact of high inflation rates on export competitiveness?
Decreases export competitiveness
How does protectionism affect a country's current account?
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Why might a country with a lack of comparative advantage struggle in international trade?
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How are long term current account deficits typically funded?
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What type of policy aims to reduce business costs, encourage investment, and shift the LRAS/PPF out, thereby reducing inflation?
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Which policy involves decreasing government spending, increasing taxes, and subsequently leading to lower disposable income and less demand for imports?
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What is a potential negative consequence of protectionist policies like tariffs on imports?
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Which factor may contribute to making UK products more attractive to foreigners by making them appear cheaper?
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What is a potential downside associated with less competition for domestic industry due to protectionist policies?
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Which condition states that a devaluation of the currency might not lead to an immediate improvement in the trade balance and could be inflationary?
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Which policy aims to increase the Long-Run Aggregate Supply (LRAS) in order to lower prices and make exports more competitive?
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What is a potential disadvantage of supply-side policies in terms of boosting exports?
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How can some supply-side policies potentially violate international regulations such as WTO or EU rules?
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Which of the following is a benefit of protectionist policies to solve a current account deficit?
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What is a common disadvantage of tariffs as a protectionist measure to solve a current account deficit?
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How does protectionism affect vulnerable industries when used to tackle a current account deficit?
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