1 (a) A firm is described as a multinational corporation (MNC) if it
(1)
A has shareholders in many countries
B exports goods to other countries
C is owned by the government
D operates in more than one country

(b) An increase in which one of the following would be most likely to
encourage saving?
(1)
A Interest rate
B Income tax rate
C Exchange rate
D Indirect tax rate

(c) What is meant by the term imports?
(2)
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(d) Describe one reason why governments make benefit payments.
(2)
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Figure 1 shows the UK's imports and exports for the year ending July 2019.

Figure 1
(e) Using the data in Figure 1, calculate in \(£ b n\), the current account for the UK year ending July 2019. You are advised to show your working.
(2)

In December 2019, the UK and the European Union (EU) negotiated North Sea fishing quotas for 2020. It was agreed to increase the fishing quota for haddock by \(30 \%\).
(f) Using the diagram below, draw the effects of the introduction of the new quota on the equilibrium price and quantity of haddock. Label the new curve, the new equilibrium price and new equilibrium quantity.
(3)

Norway had a current account surplus of 19.07bn Norwegian Krone (NOK) in the
fourth quarter of 2019.
(g) Explain one possible reason why a country such as Norway had a current
account surplus.
(3)
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The rate of Value Added Tax (VAT), a type of indirect taxation in the UK, is \(20 \%\).
(h) With reference to the data above and your knowledge of economics, analyse how
a reduction in indirect taxation is likely to affect the standard of living in a country
such as the UK.
(6)
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What is meant by the term imports? (2)

Answer:

Knowledge points:

Solution:

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