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ScotlandEconomics

Global Economic Activity

5 dot points across 5 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How does a country record its dealings with the rest of the world, and what does a deficit mean?

The balance of payments: the structure of the current account, the meaning of a current account surplus and deficit, the causes of a deficit, and policies to correct one.
An SQA Higher Economics answer on the balance of payments, covering the structure of the current account (trade in goods and services, plus income), the meaning of a current account surplus and deficit, the causes of a persistent deficit, and the policies a government can use to correct one.
12 min answer →

What sets the price of one currency in terms of another, and why does it matter?

Exchange rates: how a floating exchange rate is determined by the demand for and supply of a currency, the causes of appreciation and depreciation, and their effects on exports, imports and the economy.
An SQA Higher Economics answer on exchange rates, covering how a floating exchange rate is set by the demand for and supply of a currency, the causes of appreciation and depreciation, and their effects on exports, imports, inflation and the wider economy, using the SPICED memory aid.
12 min answer →

How does the global economy affect rich and poor countries, and which institutions try to manage it?

The impact of the global economy: developing and emerging economies and the barriers they face, the effects of globalisation on different countries, and the role of global institutions (the WTO, IMF and World Bank).
An SQA Higher Economics answer on the impact of the global economy, covering the characteristics of developing and emerging economies and the barriers to their development, the uneven effects of globalisation, and the roles of the World Trade Organisation, International Monetary Fund and World Bank.
13 min answer →

What are multinationals, why do they spread across the world, and who gains or loses?

Multinationals and globalisation: the nature and growth of multinational companies, the reasons they locate abroad, and the costs and benefits of multinationals to host countries.
An SQA Higher Economics answer on multinationals and globalisation, covering what a multinational company is and why these firms grow, the reasons they locate in foreign countries (lower costs, new markets, resources), and the costs and benefits of multinationals to the host country.
12 min answer →

Why do countries trade, and should that trade be free or protected?

Understanding global trade: the reasons countries trade and the gains from specialisation and comparative advantage, free trade versus protectionism, and the methods and effects of protection.
An SQA Higher Economics answer on global trade, covering why countries trade, the gains from specialisation and comparative advantage, the case for free trade and globalisation, the arguments for protectionism, and the methods of protection (tariffs, quotas and subsidies) with their effects.
13 min answer →