01 explain three protectionist policies that a government could introduce to reduce a deficit on the current account of the balance of payments. (15)
02 Assess the view that the progress made towards free trade has brought significant economic benefits both to the UK and to the rest of the world. (25)
Essay due Thursday 01 Feb 2013
Answer Technique
15 mark questions should start with the definiton and development of the key term in the question - protectionist poicies are the focus but your consideration of this should lead into a brief reference to the idea of a current account deficit.
Most questions require you to develop two issues identified in the text, often a demand-side, supply side persepective is worthy of merit. However here with the question asking you for 3 explict polices, a brief development of these with diagrammatic support should easily move you quickly towards full marks.
25 mark question
The essay is perhaps more challenging than the data response. Read the question carefully and note the words in bold.
Introductions clarify key terms and establsih context - some reference to the UK and the rest of the world is required. The progress towards free trade could be considered within the context of the development of multilateral institutions such a GATT/WTO and regional trade agreements.
Economic benefits is your metric: what variable could be used as indicators? growth=GDP?, living standards = GDP per capita?, stability= low inlfation? fiscal balance? balance on the curent account in the BOP?
Your issues (would recommend 3) must be clearly paragraphed and developed through chains of causality (analysis) with supporting diagrams (integrated), that are applied to a real world context (application). Each issue should be closed out with an evaluative comment which looks towards the significance, or short and long term consequences of the point...the factors it depends on are often a good source of evaluation.
Since the focus is on benefits: each benefit could be offset against a potential cost for an evaluative feel to close each issue
micro welfare benefits from free trade (trade creation) and rising competition (contestabilty) and economies of scale could be considered within a allocative / productive efficiency framework
comparative advantage and interindustry trade could be considered within a ppf framework but should be brought to life with real world examples
stability + dynamic efficiency could be considered AD short run AS short run/long run framework
look to illustrate each economic concept with a real world reference or data (perhaps the data response questions have some real world data you can use?)
The final paragraph is your chance to pull the 3 issues together and refer back to the question set. The conclusion should be a chance to suggest the kind of complexities which could be developed if there wasnt the contraint of examination time. Think of it as "economic freestyling"
