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22. TRADE QUESTIONS

This topic entails :-

  1. Identifying and defining types of trade
  2. Discussing factors influencing trade
  3. Identifying major exports and imports of Kenya
  4. Discussing significance of trade to Kenya
  5. Discussing problems facing trade in Kenya
  6. Role played by selected trading blocks in the economies of their respective regions.

 

 

1.  Use the diagram below to answer question 5a and 5b  

 

 

a) Identify the type of trade shown above

 b) State problems country X is likely to face in the trade shown above

 

2.  (a) Give two types of international trade  

 (b) State two reasons why there is less trade between Kenya and other African countries  

 

3.  (a) State two problems facing trade in Kenya.

 (b) Give three benefits of regional trading blocs.

 

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4.  (a) Outline two objectives of the common market for Eastern and Southern Africa (COMESA)

 (b) State two efforts made by the Kenya government to enhance external trade

 

5.  a) i) Differentiate between visible and invisible exports  

  ii) Name three invisible exports from Kenya

 b)i) Apart from the Economic Community of West African States (ECOWAS) name two

other regional trading blocks in Africa

  ii) Identify three member countries of ECOWAS

  iii) Explain five economic benefits of the Economic Community of West Africa

states (ECOWAS)

 

6.  (a) What is balance of payment?

 (b) Identify three problems that face traders dealing with primary goods

 

7.  (a) Distinguish between visible and invisible export.

 (b) State three negative effects of a country over relying on import goods.

 

 

 

22. TRADE  ANSWERS

1. a) – Bilateral trade  

b) – Low earnings due export of agricultural products and raw materials which have low value  Heavy expenditure due to importation of manufactured goods which are expensive

  • Unpredictable production since agriculture she relies on for export depends on climate which is unreliable  

2. a) – Bilateral

– Multilateral  

b) – Similar products  

– Limited transport/ communication links

– Colonial patterns of trade

– Limited manufactured goods

– Prohibitive tariffs to protect local industries  

3.  ( a) – Scarcity of goods

  • Inadequate capital supply
  • High costs of getting trading permits/licences
  • Lowly developed roads/transport network
  • Trade barriers
  • High cases of poverty among the people
  • Inadequate market buildings
  • Insecurity
  • Smuggling of essential goods

b) – They have helped crate cooperation among member states

– Member states have a longer market for their goods

– The expanded market ha promoted industrial development

– Goods have been made cheaper for people in the region through reduction of tariffs

– Employment opportunities have been created through industrial development

– Member states are able to invest in joint development projects like railway construction.

– Trade in the regions has boosted agricultural development

– The common market has made people of the member state enjoy a variety of commodities

– There is reduced reliance on goods and services from other parts of the world

4.  a) – To eliminate taxes on goods produced within the member countries.

 – To enable the member states to increase use of their raw materials.

 – To enable people in the region to interact and exchange ideas freely.

 – To reduce unnecessary competition among member states.

 – To promote transport & communication between the countries.

 – To create a common market for the goods produced in the member countries.

 – To establish a common bank COMESA bank to aid transaction.

b) – Improving infrastructures.

 – Joining trading blocs such as COMESA, EAC.

 – Creating Export Processing Zones. (EPZ) to promote the volume of exports.

 

5.  a i) Visible exports are tangible goods sent o other countries for sale while invisible

export are transactions between countries which lead to monetary returns

ii)  -Tourism  

-Financial services

-Transport services

-Loans/ grants/ Aids

 

b i) – COMESA  

  – Southern African Development Community (SADC)

ii) Berlin Niger Nigeria  Ghana  

 Burkina faso  Mauritania  Liberia

 Mali Guinea  Senegal  Togo Cape town

 Cote de voire  Gambia  Guinea Bisau Cameroon

iii)- Encouraged the development of industries  

-Phased out all customs and tariffs on goods originating within West Africa

-Improvement of tele- communication

-Exchange of technology

-Campaigned for the sale of petroleum from Nigeria to member states at reduced prices

 

 

6.  a) Balance of payment is the difference between visible exports and imports and also i

nvisible exports and inputs in the value of trade taking place between two countries. b) – They are perishable.

  • Some are bulky making transportation difficult.
  • Are of low value
  • They are exhaustible/supply may fluctuate negatively depending on season.
  • Inadequate capital/ for expansion since a large capital outlay is needed.

 

  1. a) Visible exports are tangible goods sent to other countries for sale while invisible

exports are transactions between countries which lead to monetary returns like

interest and dividends on the foreign investments b) – Hinder growth of home infant industries due to stiff competition/ slows

industrialization

  • Creates a state of dependency on developed countries/ slows exploitation of national resources
  • Hinder diversification of the economy
  • The country experiences unfavorable balance of trade/ retards economic development
  • Whenever there is poor relationship with the trading partner the country experiences shortage of the import goods
  • The country spends her foreign exchange reserve on imports/ faces devaluation of her local
  • currency  


 




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EcoleBooks | 22. TRADE QUESTIONS AND ANSWERS

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