• China primarily exports manufactured goods, while importing raw materials such as food and oil. Analyse the impact on China's terms of trade of the following events:

a.A war in the middle east disrupts oil supply.

b.Korea develops the ability to produce automobiles that it can sell in Canada and the United States.

c.US engineers develop a fusion reactor that replaces fossil fuel electricity plants.

d.A harvest failure in Russia.

e.A reduction in China's tariffs on imported beef and citrus fruit.

• Analyse the analogy between international borrowing and lending and ordinary international trade.