International trade has many benefits for a country's population.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [2] 1 mark for each benefit Creates jobs Increases standard of living Provides a wider choice of goods Able to obtain goods/services not available domestically Greater friendship / political links Provides better quality goods May lead to lower prices
2. [3] 1 mark for each correct answer Each container carries only one type of cargo. FALSE Logistics is a mode of transport. FALSE Marine insurance covers the loss of cargoes. TRUE
3. Benefits of allowing MNCs to open factories: MNCs provide jobs so reduce host country's unemployment.
4. Benefits: May offer training to local workers, developing their skills.
5. Benefits: Multiplier effect on local economy as service / support firms start up.
6. Benefits: MNC may provide goods, such as oil, not available in the country.
7. Benefits: Can improve the infrastructure such as better roads.
8. Benefits: Will attract investment which might then pay for imports.
9. Benefits: Provide access to international brands so more consumer choice with possibly better quality of goods provided.
10. Benefits: Increased competition, as local businesses have to respond, so lower prices.
11. Benefits: Goods will have the standard required all over the world.
12. Benefits: Help to meet the country's demand in fast growing markets
13. Disadvantages of allowing MNCs to open factories: MNC may exploit natural resources of a country; once resources are dried up the MNC may move on leaving the country without these resources, and sometimes pollution is left behind.
14. Disadvantages: MNC may pay higher wages than local businesses so it might attract the best of the local labour / entice people away from primary occupations so that there is less production for local needs.
15. Disadvantages: MNCs often bring in employees from other parts of the world, usually managers, and the local people can be left with the lower paid jobs.
16. Disadvantages: Profits often leave the host country going back to the MNC's home country thereby reducing foreign currency reserves.
17. Disadvantages: Local firms can go out of business as they cannot compete with the economies of scale MNCs can achieve.
18. Evaluation: MNCs are influential global organisations that attract investment into a host country, so can help a developing economy to grow. Sometimes unwise or politically-biased decisions can be made about MNCs for short term / political benefits. The government should only allow an MNC once it's considered all the future best interests of the country.