Question 21M.3.HL.TZ0.g.ii
| Date | May 2021 | Marks available | [Maximum mark: 4] | Reference code | 21M.3.HL.TZ0.g.ii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | g.ii | Adapted from | N/A |
Table 5 provides information relating to the country of Buranda.
Table 5
Using your answers to part (g)(i), explain how the change in Buranda’s terms of trade may act as a barrier to economic development.
[4]
PLEASE NOTE: This question part is not on the syllabus for first teaching 2020/first exams 2022.
This question was answered poorly. Relatively few candidates were able to explain the meaning of a deterioration of the terms of trade. The majority of responses merely focused on the prices of exports and imports, treating them separately rather than considering the relative changes and making simple inferences regarding the current account deficit. Many responses discussed the volume of exports and imports rather than the (relative) prices. It was rare to see any references to elasticities or the Marshall-Lerner condition when explaining the implications of a deteriorating terms of trade.
