Trade, exchange rates and development - Eduqas A-Level Economics (A520) overview

The trade-exchange-rates-and-development module of Eduqas A-Level Economics (specification A520) is the global-economy area of study: why countries trade, how exchange rates work, what globalisation means, and how developing economies can raise living standards. This page maps the specification statements and how they are examined.

The statements in this module

International trade and comparative advantage

Absolute and comparative advantage, the gains from trade and specialisation, the terms of trade, and the limitations of the theory.

Protectionism and trading blocs

Tariffs, quotas, subsidies and other barriers, the arguments for and against protectionism, the types of trading bloc, and the role of the World Trade Organisation.

Exchange rates

Floating, fixed and managed systems, the determinants of a floating rate, the effects of appreciation and depreciation, and the Marshall-Lerner condition and the J-curve.

Globalisation

The causes and characteristics of globalisation, the role of multinational corporations and foreign direct investment, and the costs and benefits for developed and developing economies.

Economic development and developing economies

The difference between growth and development, the measurement of development including the Human Development Index, the characteristics of developing economies, and the barriers to development.

Strategies to promote development

Market-oriented and interventionist strategies, trade and aid, foreign direct investment, microfinance and debt relief, and their effectiveness.

How this module is examined

Eduqas Economics is a two-year linear course with three papers at the end. This content is sampled across all of them and is the focus of Section C of Component 3: Component 1 uses multiple-choice and short structured questions, Component 2 uses data-response calculations (comparative advantage, tariffs, exchange rates), and Section C of Component 3 offers a choice of trade-and-development essays marked by levels of response, which often combine micro and macro analysis.

How to study this module

1. Master the quantitative skills. Comparative advantage from opportunity costs, the welfare effects of a tariff, and exchange-rate conversions all recur in Component 2.
2. Draw the key diagrams. The tariff diagram and the exchange-rate supply-and-demand diagram are frequent and high-value.
3. Hold the trade-offs in mind. Free trade versus protection, the effects of a depreciation, and trade versus aid are the central evaluation debates.
4. Build a bank of examples. The East Asian tigers, US-China tariffs, sterling's depreciation and the HDI rankings make application marks easy.

Work through the statements

Each statement has its own focused answer page with worked exam questions and cross-links: international trade and comparative advantage; protectionism and trading blocs; exchange rates; globalisation and trade policy; economic development and developing economies; and strategies to promote development.

For the official specification

Eduqas publishes the full specification (A520), past papers and mark schemes at eduqas.co.uk. Always revise from the current specification and Eduqas's own past papers, because the multiple-choice format of Component 1 and the levels-of-response mark schemes are board-specific.