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Section 2: International trade (10 marks) Background Kenya, a country on the east coast of Africa, was the 3rd largest exporter of tea in the

Section 2: International trade (10 marks) Background Kenya, a country on the east coast of Africa, was the 3rd largest exporter of tea in the world in 2021. Kenya is reliant on exporting tea as one of its main sources of income it is by far its most important export. It's coffee exports only comes at a distant third place (to learn more about Kenya's economy, go here). However, the global tea price has been steadily falling (see here). From more than USD5 per kilo in the year 2009, it is today at USD2.83 per kilo. Kenya's terms of trade (TOT) in 2009 was 100. The TOT is 76.3, as most recently recorded on tradingeconomics.com. To see this country's high and low complexity exports, use Harvard University's Atlas of Economic Complexity (click here): - Enter the country's name and click 'start exploring' - Find the section called 'Export basket' (the products it exports). - Lastly, click on 'Export complexity' near the bottom. ... Question 1. Recall the change of Kenya's TOT mentioned above, from 100 to 76.3. What does this change indicate about Kenya's exports and imports? Evaluate and discuss the effects of this on the balance of trade (BOT) and GDP of Kenya if the change in the TOT continues in that direction. 2. Go to the Harvard University's Atlas of Economic Complexity, and search for Kenya. Select any one (1) export item from this country whose complexity is low. Propose how this item's complexity could be improved using creativity, innovation or some form of value-adding. Provide interesting detail. Briefly argue how your proposal here might be beneficial for this country's economy, such as for its TOT, BOT and GDP. Please give the answer in bulletins.

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