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3 Fig. 3.1 shows the Balance of Payments in three countries: country A, country B and country C.
Balance of Payments ($m)
Country A Country B Country C
Visible Trade: Exports 9589 8912 4324
Imports 8364 6327 5675
Visible Trade Balance 1225 2585 (1351)
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Invisible Trade Balance 1245 512 3412
Fig. 3.1
Use Fig. 3.1 to help you answer the following questions.
(a) (i) Which country has the most income from selling goods abroad?
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(ii) Which country has a visible trade deficit?
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(iii) Define invisible trade.
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(b) Explain the effects on imported goods if country C:
(i) introduces tariffs.
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(ii) places embargoes on certain goods.
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(c) Do you think having a stall at a trade fair is useful for exporters? Give reasons for your answer.
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(d) Many exporters are concerned with the risk of non‑payment in international trade.
Discuss two methods of payment that exporters can use to make sure that they do receive
payment. Which method of payment do you recommend? Give reasons for your answer.
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[Total: 18]
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7100/21/O/N/24
