Question 4

(a) Trade liberalisation is essential from the perspective of the growth of world trade and individual

economies. Nonetheless, most countries' government impose some form of protectionism.

(i) Describe any TWO (2) forms of protectionism. (4 marks)

(ii) Explain any TWO (2) reasons of trade restriction. (6 marks)

(b) The table below shows the production of healthcare products and consumer appliances for

Malaysia and Thailand.

Healthcare products

(thousand units)

Consumer appliances

(thousand units)

Malaysia 40 50

Thailand 20 18

(i) State and explain which country has the absolute advantage in the production of

healthcare products and consumer appliances, respectively. (2 marks)

(ii) Explain which country has the comparative advantage in producing healthcare

products. (4 marks)

(iii) Explain which country has the comparative advantage in producing consumer

appliances. (4 marks)

(c) Define "exchange rate" and state TWO (2) types of exchange rate systems. (5 marks)