The multilateral trading system aims to promote the healthy economic growth of nations by fostering a system of balanced trade between exports and imports. A country with a balanced trade is able to sell the goods and services that it produces, thereby being able to import goods and services that it needs.

a) However, when there is a continuing imbalance in trade, that is, more imports than exports, the economy of a country is negatively affected. Justify how does this happen? (10 marks) b) The imposition of tariffs or duties is necessary to check the unfair exchange of goods between countries. Protection or retaliatory action such as temporary duty is imposed to resolve such problems. explain the reason for tariffs imposition and the outcome from it.