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Question 18N.3.HL.TZ0.2d

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Date November 2018 Marks available [Maximum mark: 2] Reference code 18N.3.HL.TZ0.2d
Level HL Paper 3 Time zone TZ0
Command term State Question number d Adapted from N/A
d.
[Maximum mark: 2]
18N.3.HL.TZ0.2d

Figure 3 illustrates the market for cotton in the country of San Marcus, a small closed economy. Cotton is used as an input in the San Marcus textile industry. Quantity is in thousands of kilograms (kg).

The Government of San Marcus decides to provide a subsidy equal to $8 per kilogram to its producers of cotton.

San Marcus now joins the World Trade Organization (WTO) and agrees to slowly liberalize trade, becoming an open economy.

(d)

State two functions of the WTO.

[2]

Markscheme

Allocate [1] for each valid function.

Functions may include:

  • promotes trade liberalization
  • sets trade rules
  • ensures that trade rules are adhered to
  • settles trade related disputes
  • trade-related technical assistance
  • a forum for trade negotiations.

NB Describing trade liberalization in two ways (eg removal of barriers, lowering of tariffs) only counts as one function.

Any other valid function(s).

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