The table in [Figure 1] shows Country X's exports and imports for 2015. Country X's main exports are tea, textiles and tourism. Country X's main imports are insurance, cars and oil. [Figure 1] | | Exports ($ million) | Imports ($ million) | |---|---|---| | Visible | 400 | 600 | | Invisible | 150 | 270 |

Mark scheme

Marking points from the official mark scheme (May/June 2016). The mark or mark type is shown in brackets.

1. [2] (a) (i) Any two benefits stated × 1 mark each
2. Consumers have wider choice of goods/services
3. Countries can obtain goods and services that are not available from domestic producers
4. Countries can dispose of surplus
5. Creates jobs
6. Increases standard of living
7. Friendship/political reasons
8. Increases government revenue
9. National Income increases/Economic growth
10. Encourages investment
11. Cheaper goods
12. Better quality goods
13. Can gain foreign currency
14. Accept any other relevant point
15. [4] (ii) Definition of visible trade (1 mark), invisible trade (1 mark) One example of each × 2 marks
16. Visible trade is the trade in goods (1) e.g. tea/textiles/cars/oil (1)
17. Invisible trade is the trade in services (1) e.g. tourism/insurance (1)
18. Accept any other relevant point
19. [3] (b) (i) 1 mark for correct export total, 1 mark for correct import total, and 1 mark for correct Balance of Payments figure
20. Total Exports – $400 million + $150 million = $550 million (1)
21. Total Imports – $600 million + $270 million = $870 million (1)
22. Balance of Payments = $550 million minus $870 million = minus/deficit $320 million (1)
23. [3] (ii) Balance of Payments (OFR applies)
24. 1 mark for stating whether this requires action (Yes = 1 mark)
25. Up to two marks for explaining actions that may be needed
26. There is a deficit of $320 million (1) which means the country is importing more than it is exporting (1) leading to less economic growth (1) and unemployment (1)
27. Need to lower imports of cars or oil (1) and increase exports (1)
28. If this persisted over several years action should be taken, although if it is only a short-term problem then the government should wait to take action (1)
29. Actions could include restricting imports (1) by increasing duties (1) or imposing quotas (1)
30. Could also encourage exports (1) by loans to exporters (1)
31. Accept any other relevant point
32. [2] (c) (i) 1 mark for stating method of communication means and 1 extra mark for a description (can be purpose or use)
33. Telephone/mobile phone (1) allows one-to-one communication/feedback (1)
34. Fax (1) allows transmission of documents (1)
35. Videoconferencing/Teleconferencing (1) allows several participants in different places to hold a meeting or discussion (1)
36. E-mail (1) allows instant written communication/can transmit copies of documents/use of Internet (1)
37. Telex (1) allows instant written communication (1)
38. Internet (1) buying online (1)
39. Accept any other relevant point
40. [6] (ii) Level 2 (4–6 marks) Has discussed whether or not rapid transfer of information is always important in international trade and has given a reasoned opinion (No need for the argument on both sides)
41. Level 1 (1-3 marks) Has commented on rapid transfer of information in international trade with/without an opinion
42. Many occasions when rapid transfer of information is necessary, such as a quotation for a contract or obtaining specifications.
43. Not always necessary, for example when sending bulk supply of brochures.
44. Electronic means now widely used, such as e-mails with attachments.
45. Slower means, such as postal services are still used to send brochures and catalogues.
46. The Internet has meant that rapid communication is easier and cheaper than previously and this has made international trade much more accessible to small companies.
47. Accept any other relevant point