International Relations & Trade is one of 9 topics in the Grade 12 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. A tariff is best described as:
A tax imposed on imported goods, raising their price to domestic consumers
A direct limit on the physical quantity of a good that may be imported
A government payment that lowers a domestic firm's costs
A voluntary agreement between two exporting countries
Answer: A tax imposed on imported goods, raising their price to domestic consumers — A tariff is a tax on imports that raises their price to domestic consumers, making domestically produced alternatives relatively more competitive.
Easy
2. The principle that countries benefit by specialising in producing what they can produce relatively most efficiently, and trading for the rest, is called:
Comparative advantage
Protectionism
A trade deficit
A tariff barrier
Answer: Comparative advantage — Comparative advantage is the economic principle underpinning the case for free trade: specialisation and trade based on relative efficiency can raise total output and consumption for all trading countries.
Medium
3. What term describes a new, developing local industry that may need temporary protection from foreign competition in order to grow large and efficient enough to compete internationally?
Answer: An infant industry — An infant industry is a young, developing domestic industry that protectionist advocates argue may need temporary protection to become internationally competitive over time.
