Photo AI
You are given the following information about a country's trade in a year - Leaving Cert Economics - Question 7 - 2017
Question 7
You are given the following information about a country's trade in a year. Visible Exports Visible Imports £m 22,000 £m 23,500 (i) Explain the term Balance of T... show full transcript
Worked Solution & Example Answer:You are given the following information about a country's trade in a year - Leaving Cert Economics - Question 7 - 2017
Step 1
Step 2
Using the above data, calculate the Balance of Trade and state if it is a surplus or deficit. Show your workings.
Answer
To calculate the Balance of Trade:
Balance of Trade = Visible Exports - Visible Imports
Using the provided numbers:
Balance of Trade = £22,000 - £23,500
Balance of Trade = -£1,500
The balance of trade is a deficit.
Step 3
If the level of visible exports above increased by €2,000, calculate the new Balance of Trade and state if it is a surplus or deficit. Show your workings.
Answer
With the increase in visible exports:
New Visible Exports = £22,000 + £2,000 = £24,000
Now, calculate the new Balance of Trade:
New Balance of Trade = £24,000 - £23,500 = £500
Since the value is positive, it indicates a surplus.
Step 4
Step 5
State and explain two economic factors, other than the rate of corporation tax, which a multinational company may consider when choosing Ireland as a location for its business.
Answer
-
Availability of Skilled Workforce: A skilled labor force, particularly in technology and finance, can enhance productivity and innovation.
-
Efficient Transport Network: Access to reliable transportation is crucial for businesses to facilitate the movement of goods and services.
Step 7
Discuss one economic effect which the exit of the UK from the EU may/could have on Irish firms exporting to the UK.
Answer
Irish firms exporting to the UK may face reduced sales due to possible tariffs imposed on goods. This could raise prices for UK customers, potentially decreasing demand for Irish products.
Step 8
Discuss one economic effect which the exit of the UK from the EU may/could have on tourism between Ireland and the UK.
Answer
Tourism between Ireland and the UK may be affected by fluctuations in the euro to sterling exchange rate. If the euro strengthens against the pound, it could discourage UK tourists from traveling to Ireland due to higher costs.
Step 9
Discuss one economic effect which the exit of the UK from the EU may/could have on consumers in Ireland.
Answer
Consumers in Ireland could face higher prices if tariffs are reintroduced on UK goods. This increase in costs may lead to a rise in the prices of certain goods that rely heavily on UK imports.