Practise 92 real questions on International economic issues from 2021 to 2026. See the answer and explanation as soon as you answer.
International economic issues is one of the 11 main topics in our A Level Economics (Cambridge (CAIE) 9708) question bank, and about 10% of its real questions come from it. Tayyari Karo has 92 real questions on this topic from 2021 to 2026, from Paper 1, Paper 2, Paper 3, Paper 4; 67 are multiple choice and marked instantly, and the rest are structured questions with a model answer. By difficulty: 55 medium, 30 hard, 7 easy.
Work through the questions below, then open the explanation for each one. Redo the ones you missed a few days later.
These are real past-paper questions. Think of your answer first, then open the explanation.
Which measure would not be part of a government subsidy to protect domestic producers from competition?
Answer: A. import quotas
Import quotas are a trade barrier, not a subsidy; the others are forms of financial support to producers.
What is not a limitation of the theory of comparative advantage?
Answer: C. one country being more efficient in the production of all goods
One country being more efficient at producing all goods is compatible with comparative advantage theory (which shows mutual gains from trade are still possible via relative, not absolute, efficiency), so it is not a limitation. The other options (factor immobility, trade restrictions, transport costs) are genuine real-world limitations.
A government subsidises training to improve the skills of workers in the industrial sector of an economy. What is the most likely effect on the current account of the balance of payments?
Answer: B. exports rise
Improved skills raise labour productivity and the competitiveness/quality of industrial output, which is likely to increase exports.
Which measure is aimed directly at promoting international trade?
Answer: C. subsidies paid to export industries
Subsidies paid to export industries directly lower export costs/prices, making exporters more competitive abroad and so directly promoting international trade. Decreasing quotas would liberalise imports (indirectly related), while raising interest rates and general wage subsidy schemes are not trade measures.
What would be the best policy to increase the value of a currency?
Answer: B. Increase interest rates.
Higher interest rates attract foreign capital inflows seeking better returns, increasing demand for the currency on the foreign exchange market and raising its value.
Why might an unfavourable movement in a country's terms of trade benefit its economy?
Answer: D. It would make the country's exports relative to imports more competitive internationally.
A worsening (falling) terms of trade means export prices fall relative to import prices, making the country's exports relatively cheaper/more competitive internationally, which can boost export volumes and the current account, benefiting the economy.
Section C, Or. 5 (a) Explain the difference between trade embargoes and export subsidies and consider which is likely to be the more effective tool of protection. [8]
Point-based: AO1 up to 3, AO2 up to 3, AO3 up to 2. AO1: trade embargoes - complete bans on certain imported products from particular countries (1); export subsidies - government payments to domestic firms that keep production costs down, encouraging lower prices and making exports more competitive (1); difference made clear and explicit (1). AO2: which is more effective - embargoes are often political rather than economic (comprehensive, partial/selective, unilateral/multilateral); export subsidies aim to increase exports (effect depends on price elasticity of demand for the exports), make domestic products competitive but distort trade and can make firms less efficient. …
The full model answer is in the app.
OR 5(b) Assess whether an economy will always benefit from having a surplus on the current account of its balance of payments. [12]
AO1/AO2 (max 8 marks): potential benefits — surplus foreign exchange available for investment abroad, higher exports supporting jobs in the export sector, lower import spending supporting domestic-good jobs, stimulus to economic growth; potential disadvantages — a surplus can signal weak domestic demand and lower consumer spending which could reduce domestic employment, could lead to lower economic growth, could result from a recession, and can contribute to lower output/employment in deficit countries. …
The full model answer is in the app.
| Session | Paper 1 | Paper 2 | Paper 3 | Paper 4 |
|---|---|---|---|---|
| May/June 2026 | 4 | 3 | – | – |
| May/June 2025 | 5 | 1 | – | – |
| October/November 2025 | 5 | 2 | – | – |
| May/June 2024 | 7 | 1 | – | – |
| October/November 2024 | 7 | 2 | – | – |
| May/June 2023 | 6 | 1 | – | – |
| October/November 2023 | 3 | 4 | 1 | 2 |
| May/June 2022 | 7 | 1 | – | – |
| October/November 2022 | 8 | 2 | – | – |
| May/June 2021 | 7 | 4 | – | – |
| October/November 2021 | 7 | 2 | – | – |
92 real A Level Economics (9708) questions on International economic issues from 2021 to 2026, from Paper 1, Paper 2, Paper 3, Paper 4. Each one shows the year, session and paper it came from.
Yes. Every question shows the correct answer and a short explanation the moment you answer.
You can start free with no signup. A small set of papers per subject is free, and Premium unlocks every paper, the full question bank and the paper PDFs.
