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The Irish economy is 'performing well' but Brexit poses a threat - Leaving Cert Business - Question 3(A) - 2017
Question 3(A)
The Irish economy is 'performing well' but Brexit poses a threat. Source: Financial Times, December 2016 Invisible Exports: €101,750 million Total Exports: €194,366... show full transcript
Worked Solution & Example Answer:The Irish economy is 'performing well' but Brexit poses a threat - Leaving Cert Business - Question 3(A) - 2017
Step 1
Define the term tariff and explain the possible effect on the Irish economy if the UK Government was to impose a tariff on Irish goods in the future.
Answer
A tariff is a charge or tax applied to imported products, aimed at persuading consumers to purchase domestically produced goods or to restrict goods from another country.
If the UK Government were to impose a tariff on Irish goods, it could lead to a few significant effects on the Irish economy:
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Decrease in Exports: Companies in Ireland that export to the UK might experience a reduction in demand due to increased prices from tariffs, resulting in fewer exports.
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Loss of Profits and Unemployment: Firms relying on exports could face decreased profits, leading to potential layoffs or reduced hiring. This would affect the job market, particularly in export-oriented sectors.
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Balance of Trade Impact: Given that the Balance of Trade measures the difference between exports and imports, fewer exports to the UK could lead to a worsened Balance of Trade for Ireland, which might prompt firms to seek new markets to compensate for reduced trade with the UK.