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A Level H1 Economics International Economics Quiz

Free A Level H1 Econs International Economics quiz, HY3 Exam version, with questions, answers, and A Level-style practice for Singapore students.

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Questions

A-Level Economics H1 Quiz - International Economics

Name: ___________________________
Class: ___________________________
Date: ___________________________
Score: ___________ / 40

Duration: 60 minutes
Total Marks: 40
Topic: International Economics

Instructions:

Answer all 20 questions.
Section A: Data and Concept Interpretation (Questions 1–5)
Section B: Source-Based Structured Response (Questions 6–13)
Section C: Diagram, Evaluation and Synthesis (Questions 14–20)
Use clear economic reasoning and refer to data where provided.
Write your answers in the spaces provided.

Section A: Data and Concept Interpretation (Questions 1–5)

1. With reference to Table 1, compare the value of merchandise exports for Country A and Country B from 2019 to 2023. [2]

Table 1: Merchandise Exports (US$ billion)

Year	Country A	Country B
2019	210	145
2023	268	190

2. Describe the trend in Country A's current account balance from 2020 to 2023 shown in Table 2. [2]

Table 2: Current Account Balance (% of GDP)

Year	Country A
2020	-2.1
2021	-1.4
2022	-0.8
2023	+0.3

3. Using Table 3, compare the inflation rates in Economy X and Economy Y over 2021–2023. [2]

Table 3: Inflation Rate (% p.a.)

Year	Economy X	Economy Y
2021	1.2	3.5
2022	2.0	4.1
2023	2.6	3.9

4. State two reasons why a country may impose an import tariff. [2]

5. Define "terms of trade" and state how it is calculated. [2]

Section B: Source-Based Structured Response (Questions 6–13)

The following extract is used for Questions 6–9.

Extract 1:
In 2022, Nation Z introduced a 15% tariff on imported automobiles to protect its domestic car industry. Prior to the tariff, 60,000 cars were imported annually at an average price of $25,000. Domestic production was 40,000 units. After the tariff, imports fell to 35,000 units and domestic production rose to 58,000 units. The government collected tariff revenue on all imported units.

6. With reference to Extract 1, calculate the annual tariff revenue collected by Nation Z after the tariff was imposed. [2]

7. Explain how the tariff in Extract 1 would affect domestic producers and foreign exporters. [3]

8. Using demand and supply diagrams, explain the effect of the tariff on the equilibrium quantity of cars sold in Nation Z. [3]

9. Discuss whether the tariff is likely to improve Nation Z's standard of living. [4]

Extract 2:
Country M operates a fixed exchange rate. In 2023, its central bank maintained the currency at 1.00 M-dollar = 0.50 US-dollar. Due to a surge in imports, there was excess demand for US dollars in the foreign exchange market. The central bank sold US$ reserves to defend the peg.

10. Explain why excess demand for US dollars arose in Country M's foreign exchange market. [2]

11. With reference to Extract 2, describe the action taken by the central bank and its effect on reserves. [2]

12. Using a diagram of the foreign exchange market, show the effect of the central bank's intervention. [3]

Graph for Q12 (ALEVEL Economics H1)

Generated graph for Q12.

13. Evaluate the sustainability of Country M's fixed exchange rate policy given the described pressures. [4]

Section C: Diagram, Evaluation and Synthesis (Questions 14–20)

14. Draw a production possibility curve (PPC) and show the effect of increased specialisation in export goods due to trade liberalisation. [3]

15. Explain how an appreciation of a country's currency affects its exports and imports. [3]

16. Using an AD/AS diagram, explain how a rise in export demand affects national income. [3]

17. Compare the effects of a quota and a tariff on domestic price and quantity. [3]

18. Discuss whether free trade always benefits all participating countries. [4]

19. With reference to Table 4, calculate the terms of trade index for 2023 using 2020 as base year (Base = 100). [3]

Table 4: Price Indices (2020=100)

Year	Export Price Index	Import Price Index
2020	100	100
2023	130	115

20. Evaluate the view that globalisation has reduced the ability of governments to control inflation. [4]

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Answers

A-Level Economics H1 Quiz - International Economics: Answer Key

Total Marks: 40
Topic: International Economics

Section A: Data and Concept Interpretation

Q1. [2 marks]

Both Country A and Country B increased merchandise exports from 2019 to 2023. [1]
Country A rose from $210bn to$ 268bn (increase of $58bn), while Country B rose from$ 145bn to $190bn (increase of$ 45bn); Country A had higher exports and grew more in absolute terms. [1]
Teaching note: Compare both values and direction. Common mistake: stating only one country.

Q2. [2 marks]

Country A's current account balance improved from a deficit of -2.1% of GDP in 2020 to a surplus of +0.3% in 2023. [1]
The trend was a steady narrowing of deficit then surplus from 2021 to 2023. [1]
Teaching note: Describe direction and turning point (deficit to surplus).

Q3. [2 marks]

Economy Y had consistently higher inflation than Economy X in all three years. [1]
Both increased from 2021 to 2022, but Economy Y fell slightly in 2023 while X continued rising. [1]
Teaching note: Use comparative language; note divergence in 2023.

Q4. [2 marks]
Any two: protect domestic industries from foreign competition; raise government revenue; correct trade deficit; retaliate against unfair trade practices. [1+1]
Teaching note: Do not accept "to reduce exports" (wrong direction).

Q5. [2 marks]

Terms of trade = (Export Price Index / Import Price Index) × 100. [1]
It measures the relative price of a country's exports compared to its imports. [1]
Teaching note: Definition and formula required.

Section B: Source-Based Structured Response

Q6. [2 marks]
Tariff per car = 15% × $25,000 =$ 3,750.
Imports after tariff = 35,000 units.
Revenue = 35,000 × $3,750 =$ 131,250,000 (US$131.25 million). [2]
Working: Show % calc and multiplication.

Q7. [3 marks]

Domestic producers: benefit from higher price and increased sales (40k → 58k). [1]
Foreign exporters: face reduced demand (60k → 35k) and lower revenue. [1]
Consumers in Nation Z face higher prices. [1]
Marking: 1 mark each group effect.

Q8. [3 marks]

Diagram: D and S for cars; tariff shifts S upward by tariff amount (or tax wedge). [1]
Equilibrium Q falls from 100k (60+40) to 93k (35+58). [1]
Price to consumers rises. [1]
Teaching note: Show tariff as supply shift or wedge.

Q9. [4 marks]
For: protects jobs, develops industry, revenue. [2]
Against: higher prices for consumers, less choice, inefficiency, possible retaliation. [2]
Marking descriptors: 2 marks for one side, 4 for balanced with evaluation.

Q10. [2 marks]

Surge in imports increased demand for foreign currency (US$). [1]
At fixed rate, supply of US$ from exports insufficient. [1]

Q11. [2 marks]

Central bank sold US$ reserves to supply market. [1]
Reserves decreased. [1]

Q12. [3 marks]

Diagram shows D > S at peg → excess demand. [1]
Central bank supplies US$ shifting S right. [1]
Maintains peg, reserves fall. [1]
Image requirement: Graph with peg line, excess demand gap, S shift.

Q13. [4 marks]

Not sustainable if reserves depleted. [2]
Requires constant intervention; loss of reserves limits defense. [2]
Evaluation needed for full marks.

Section C: Diagram, Evaluation and Synthesis

Q14. [3 marks]

PPC drawn with exports on one axis. [1]
Outward shift / reallocation toward export goods. [1]
Shows gains from specialisation. [1]

Q15. [3 marks]

Appreciation makes exports more expensive foreign → X falls. [1]
Imports cheaper → M rises. [1]
Net exports fall, AD affected. [1]

Q16. [3 marks]

AD shifts right due to higher X. [1]
Real national income rises. [1]
Diagram with AD/AS. [1]

Q17. [3 marks]

Both raise domestic price. [1]
Quota limits Q directly; tariff reduces Q via price. [1]
Tariff yields revenue; quota may not. [1]

Q18. [4 marks]

For: efficiency, lower prices, growth. [2]
Against: losers in import-competing sectors, inequality. [2]

Q19. [3 marks]
ToT 2023 = (130 / 115) × 100 = 113.04. [2 for calc, 1 for stating index]
Working: 130÷115=1.1304×100.

Q20. [4 marks]

Globalisation transmits inflation via imports. [2]
But also increases competition lowering prices. [2]
Evaluation required.