The International Economy | AQA A-Level Economics (7136)
The International Economy
- 272 questions
- 22 subtopics
- Paper 2: The national and international economy, and available on Paper 3
- Paper 2 and Paper 3
The international economy is examined on Papers 2 and 3, and closes the course.
It covers globalisation and the firms that drive it, the theory and politics of trade, the balance of payments and exchange rates, and what separates a developed economy from a developing one.
Sample questions from The International Economy
Answer each one closed book first, then open the answer.
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The causes and characteristics of globalisation
Why does the growth of multinational corporations drive globalisation?
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Multinationals seek new markets, lower production costs, and economies of scale, leading them to expand operations across multiple countries and integrate global economic activity. -
Multinational corporations
How can multinational corporations influence government policy?
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They can exert significant bargaining power over governments, potentially influencing regulations and policies in their favour. -
Tariffs, quotas and the tariff diagram
On a tariff diagram, what happens to the world supply curve when a tariff is imposed?
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The world supply curve shifts upward by the amount of the tariff. -
Trading blocs and the World Trade Organisation
What monitoring function does the WTO perform?
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The WTO monitors national trade policies to ensure members comply with agreed rules and commitments. -
Correcting imbalances and their consequences
How does contractionary fiscal policy work as an expenditure-reducing policy?
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Higher taxes and lower government spending reduce aggregate demand, decreasing overall spending including on imports. -
Government intervention and fixed exchange rates
Why might a fixed exchange rate reduce currency speculation?
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The commitment to maintain a specific rate reduces uncertainty about future currency movements, making speculative activity less attractive and reducing volatility. -
Measuring development: the HDI and other indicators
Why is GDP per capita used as a development indicator?
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GDP per capita indicates the average economic output per person, providing a measure of material living standards. -
Corruption, governance and institutional barriers
How do ineffective legal systems hinder development?
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Ineffective legal systems fail to enforce contracts, protect property rights, and resolve disputes, increasing business risks.
The 22 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| The causes and characteristics of globalisation | Containerisation, trade liberalisation, financial deregulation and multinationals, and what globalisation looks like. | 13 |
| The impact of globalisation on developed and developing economies | The gains from investment, employment and technology, against exploitation, inequality and dependency. | 15 |
| Multinational corporations | What multinationals bring to a host country, global supply chains, transfer pricing and their bargaining power. | 9 |
| Comparative and absolute advantage | The difference between the two, calculating opportunity cost, and why both parties can gain from trade. | 9 |
| The effects of trade and changing trade patterns | The benefits and costs of trade, and what has changed the UK's pattern of trade. | 10 |
| Tariffs, quotas and the tariff diagram | Tariffs, quotas and export subsidies, and reading the welfare effects off a tariff diagram. | 10 |
| Arguments for and against protectionism | Infant industries, dumping, strategic industries and revenue, against higher prices, less choice and retaliation. | 11 |
| Trading blocs and the World Trade Organisation | Free trade areas, customs unions and the single market, and what the WTO does. | 9 |
| The components of the balance of payments | The current, capital and financial accounts, and what each records. | 14 |
| Causes of current account imbalances and investment flows | Productivity, relative inflation, the exchange rate and competitiveness, and the effect of investment flows. | 15 |
| Correcting imbalances and their consequences | Expenditure-switching and expenditure-reducing policies, and the risks a persistent imbalance creates. | 19 |
| How exchange rates are determined in a floating system | What moves the demand for and supply of a currency, and the part played by speculation. | 11 |
| Government intervention and fixed exchange rates | Direct intervention, interest rate policy and exchange controls, and the case for and against a fixed rate. | 15 |
| Floating rates and currency unions | The advantages and drawbacks of floating, and what a country gains and gives up by joining a currency union. | 17 |
| Growth, development and less-developed economies | How development differs from growth, and the characteristics of a less-developed economy. | 10 |
| Measuring development: the HDI and other indicators | The three dimensions of the HDI, and the other indicators used alongside it. | 10 |
| Investment and education as drivers of development | How investment raises the capital stock, and how education builds human capital. | 8 |
| Corruption, governance and institutional barriers | How corruption, political instability and weak institutions hold development back. | 10 |
| Infrastructure, human capital and property rights | Why poor infrastructure, weak human capital and insecure property rights constrain growth. | 13 |
| Market-based and interventionist development strategies | Trade liberalisation, privatisation and deregulation, against industrial policy, infant industry protection and redistribution. | 10 |
| Aid and trade as development strategies | The case for and against aid, and the gains and vulnerabilities that come with trade. | 18 |
| Growth, globalisation and inequality | What promotes development, what globalisation offers and exposes, and how inequality and growth interact. | 16 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
AQA A-Level Economics Active Recall Guide
Every topic, not just this one. 2,344 questions with their answers.