(b) The figure below shows a country's domestic demand and supply. Price (E) 50 40 20 30 E (1) (ii) (iii) 80 115 160 230

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B The Figure Below Shows A Country S Domestic Demand And Supply Price E 50 40 20 30 E 1 Ii Iii 80 115 160 230 1 (52.11 KiB) Viewed 24 times

(b) The figure below shows a country's domestic demand and supply. Price (E) 50 40 20 30 E (1) (ii) (iii) 80 115 160 230 Supply Demand Quantity (units) The price without international trade is £50, the world price with tariff is £40, and the world price without tariff is £20. (i) Calculate: The value of total import without tariff The value of total import with tariff The value of total tariff collected by government The value of total loss in surplus after tariff (6 marks) (ii) Do you agree with the argument that "a nation that imposes tariff on imported goods improve its welfare"? Explain your answer. (4 marks) (c) Discuss how the below event affects a free foreign exchange market, in the direction of appreciation or depreciation. An increase in domestic interest rate A lower domestic inflation than abroad A higher domestic economic growth rate than abroad Relative investment prospects improving abroad (iv) (v) Belief by speculators that the exchange rate will appreciates (5 marke)