Capital goods make up over half of Japanese exports. In 2013, although Japan's imports rose more rapidly than its exports, there was still a surplus on the current account of its balance of payments. Across the world, increasing trade was leading to new airports being opened to meet the demand for transporting goods.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2015). The mark or mark type is shown in brackets.

1. [1] A human-made good
2. [1] used to produce other goods and services
3. [1] example e.g. machinery
4. [1] inelastic demand for exports
5. [1] fall in exchange rate
6. [1] increase in demand
7. [1] rise in investment
8. [1] removal of trade restrictions abroad
9. [1] inflation in other countries
10. [1] inelastic demand for exports would mean demand falling by less than the rise in price
11. [1] fall in exchange rate would make exports relatively cheaper
12. [1] demand may increase as a result of e.g. a rise in incomes abroad
13. [1] rise in investment may make exports more quality competitive
14. [1] removal of trade restrictions abroad may make exports cheaper in foreign markets
15. [1] prices may rise by more in other countries
16. [1] reduce the value of the currency
17. [1] lower export prices
18. [1] raise import prices
19. [1] increase demand for exports
20. [1] decrease demand for imports
21. [1] impose trade protection
22. [1] e.g. a tariff would increase the price of imports
23. [1] which is likely to reduce the demand for imports
24. [1] subsidise domestic output
25. [1] lower price of exports
26. [1] increase demand for exports
27. [1] lower demand for imports
28. [1] increase income tax
29. [1] lower demand for imports
30. [1] put pressure on domestic firms to export due to lower demand at home
31. [1] improve education and training
32. [1] raise productivity
33. [1] cut costs of production
34. [1] make domestic products more internationally competitive
35. [1] reduce inflation
36. [1] may make domestic products more internationally competitive
37. [1] more likely to take into account social costs and benefits/welfare
38. [1] will not base decisions just on private costs and benefits
39. [1] will consider external costs and benefits
40. [1] e.g. lowering pollution
41. [1] a government may set price relatively low
42. [1] in order to allow more people to use it
43. [1] to lower costs for domestic firms
44. [1] to increase international competitiveness
45. [1] a government may have the finance available
46. [1] tax revenue
47. [1] may be more efficient
48. [1] keep costs low
49. [1] quality high
50. [1] due to the desire to make a profit
51. [1] may have experience of building and operating an airport
52. [1] increase efficiency
53. [1] a government spending money on an airport involves an opportunity cost
54. [1] if the private sector builds and operates an airport, the government can spend money on other areas