A trade agreement removes quotas between member countries. Domestic firms face stronger competition and invest in more efficient machinery. Which chain is most likely if the investment succeeds?
Competition decreases, productivity falls and prices rise
Competition increases, productivity rises and consumers may pay lower prices
Imports disappear, productivity falls and consumer choice rises
Quotas rise, firms become less efficient and exports increase
48 exam-style questions on AQA GCSE Economics 2.4 International trade and the global economy, covering 2.4.1a The importance of trade, 2.4.1b Advantages of trade and interdependence, 2.4.1c UK exports and imports, 2.4.2a How exchange rates are determined, 2.4.2b Effects of exchange rate changes, 2.4.3a Free-trade and its arguments, 2.4.3b Free-trade agreements such as the EU, 2.4.4a Features and growth of globalisation, 2.4.4b Benefits and drawbacks of globalisation, and 2.4.4c Moral, ethical and sustainability considerations. Each one has a worked solution and a mark scheme showing where the marks go.