QUESTION 3 [20 Marks] Maintaining stable currencies is one of the major goals of the modern central banks. Notwithstanding the efforts by monetary authorities to achieve this objective, several emerging markets currencies have depreciated substantially.

Critically discuss some of the factors affecting the performance of currencies in emerging markets and the impact on their economies.

QUESTION 4 Oil prices climbed above $80 (59) a barrel on Tuesday, hitting their highest level in three years as the pound slumped. Brent crude, the international benchmark, rose to as much as $80.69 on the day, the most since October 2018. Prices have been rising for seven consecutive days on the back of the energy crisis in Europe. Analysts believe that oil prices will continue to rise amid surging demand and tight supplies. Investment bank Goldman Sachs said Brent could hit $90 per barrel by the end of the year, warning that rising input costs, higher gas prices and weaker growth were likely to weigh on European corporate profit growth for 2021.

4.1 With the aid of well labelled diagrams, critically discuss how supply shock could result in higher prices. (10 Marks)

4.2 A high-stakes game of oil diplomacy pits Saudi Arabia against long-time ally Abu Dhabi. And the result of their fight will shape not just the price of oil for the next year, but the future of the global energy industry. Discuss oil cartel's influence on the oil price movements globally and how that affects the economy of non-oil producing countries. (10 marks)

QUESTION 5 At the outset of the COVID-19 pandemic the demand for face masks increased markedly around the globe resulting in retailers. In addition, the sales of hand sanitizers, personal protective equipment (PPE) and cleaning and fumigating and similar products swelled across several international markets since the COVID-19 outbreak began in March 2020. According to data released by Grecques Consulting Pty, an international research firm based in the US, face masks sales grew by a year-on-year increase of 400% in April 2020. However, in December of 2020, the price of face masks retraced back to its pre- COVID-19 level.

5.1 With the aid of diagrams, critically evaluate changes in the market type for the face masks industry post the initial COVID-19 shock in March 2020. (10 Marks)

5.2 Critically discuss how price elasticity of demand of face masks was affected, including its impact on revenue at the outset of the pandemic relative to the later in that year, when the price of masks returned to its pre- COVID-19 level. (10 marks)

QUESTION 6 Who the US and China have trade disputes with

Not long after US tariffs on $34 billion worth of Chinese goods kicked in, the Chinese government has responded by imposing its own 5% tariff on 545 US products, also worth a total of $34 billion. Trade disputes are nothing new for the two economic superpowers, and they are not confined to targeting each other. In total, China and the US have more than 300 disputes with different countries and trading blocks.

China's trade disputes: As the above chart shows, China is involved in a total of 55 trade disputes, either as the complainant or responder. While the majority these are with the US, China also has 13 trade disputes with the European Union, plus a handful of others withcountries including Japan and Mexico impose tariffs on hundreds of billions of dollars' worth of one another's goods. Former US President Donald Trump had long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that America is trying to curb its rise as a global economic power.

Extract: https://www.weforum.org/agenda/2018/07/united-states-china-trade-disputes-charts/

6.1 Using a diagram(s), discuss the impact of China's trade disputes with its trading partners on emerging and developing economies. (10 marks) 6.2 Using a diagram(s), evaluate the impact of the US imposing quotas on steel products from China. (10 marks)