Question 1 Report
Table 1 shows trade data for a country that exports tea and imports fertiliser.
| Year | Value of tea exports ($ million) | Value of fertiliser imports ($ million) |
|---|---|---|
| 2024 | 84 | 60 |
| 2025 | 90 | 72 |
(a) Calculate the balance of trade in goods shown in Table 1 for 2025. [2]
(b) Analyse one possible reason why the value of fertiliser imports increased. [3]
(a) The balance of trade in goods shown is export value minus import value:
\[\$90\text{ million}-\$72\text{ million}=\$18\text{ million}\]
This is a \(\$18\) million trade surplus, because exports exceed imports. [2]
(b) Domestic farmers may increase production and therefore need more fertiliser. [1] Their demand for imported fertiliser rises. [1] If the price is unchanged, the greater quantity imported raises the value of fertiliser imports. [1] Alternatively, a rise in world fertiliser prices could raise import value even if quantity did not increase.
Everything you need to excel in your exams