Explanation​:
Trade diversion happens when the formation of a trading bloc shifts production from a low-cost producer to a high-cost producer. For example, joining a customs union can require a common external tariff, raising the price of imports from low-cost producers. As a result, trade diverts to higher cost members of the customs union.

Choice B is incorrect because trade creation happens when the entry of a country into a trading bloc shifts production from a high-cost producer to a low-cost producer.

These answer choices do not specifically address the impact of joining trading blocs:

• Choice C refers to comparative advantage which is the reason production costs are high or low. It does not explain why production shifts from one producer to another.
• Choice D refers to increased competition, but production moving from low-cost to high-cost producers results from reduced competition.

Explanation​:
Choice D is correct because the government’s spending on education and health—two factors that affect human capital—has increased.

Choice A is incorrect because higher HDI values reflect an improvement in a nation's economic development.

Choice B is incorrect because a higher HDI ranking suggests a worsening in a nation's economic development compared to other nations.

Choice C is incorrect because a lower Gini coefficient indicates an improvement in income inequality.

Explanation​:
Revaluing a currency can improve a nation's standard of living, as a stronger currency can purchase more imports, the consumption of which increase living standards.

Choice A is wrong as devaluation is expansionary, which means it would cause demand-pull inflation.

Choice B is wrong as revaluation is contractionary, which means unemployment would increase as a result.

Choice C is wrong as devaluation would increase net exports, which would increase a current account surplus.

Explanation​: 

The above green area is the deadweight loss incurred due to the quota. When the quota is removed, overall economic welfare increases by that amount.

Choice B is wrong, as domestic consumers pay PWORLDPWORLD​ after the quota is eliminated.

Choice C is wrong, as the domestic consumer surplus decreases by the blue area.

Choice D is wrong, as the value of net exports should decrease, as the country imports more now (Q1Q5>Q1Q3​).

Explanation​:
Choices A, B, and C are considered when GDP per capita is adjusted for purchasing power parity.

Differences in income distribution across the population are not considered.

Explanation​:
Choice A is the correct answer because appropriate technology is generally described as small-scale solutions that are suitable for local needs, instead of large-scale solutions. Therefore, appropriate technology may not benefit from economies of scale and may be less efficient than other production methods.

Appropriate technology is usually labour-intensive (Choice D), makes use of local skills and materials (Choice C), and is affordable (Choice B).

Explanation​:
A sharp fall in net exports would cause a depreciation of the currency. In order to maintain a fixed exchange rate, interest rates can be increased in order to revalue the currency by attracting inward portfolio investment.

Choices B and C are incorrect as a fall in net exports is deflationary (AD shifts left).

Choice D is incorrect as a higher money supply would cause a further depreciation by lowering interest rates, reducing inward portfolio investment, which is the opposite of what is needed in order to maintain the fixed exchange rate.

Choice A is incorrect because when land rights are lacking or insecure, individuals may face difficulties in accessing housing and food production.

Choice B is incorrect because if the poorest of the poor are excluded from accessing credit, they will struggle to generate economic activity.

Choice C is incorrect because women and girls facing discrimination will have limited economic opportunities in terms of education, health, work, and access to finance, contributing to greater poverty.

Explanation​:
(I) Price divergence between exports and imports may cause potential balance of payments problems.
(II) Price volatility for primary commodities contributes to economic instability in terms of greater income risks for individual farmers and governments.
(III) Primary export revenues may cause the domestic currency to appreciate, making other exports less competitive.
(IV) The allocation of windfall incomes can cause conflict and political instability in resource-rich countries by exacerbating issues related to poor governance and dependence on primary commodities.

Explanation​:
When a tariff is imposed:

• The domestic quantity supplied is at the intersection of the SdomesticSdomestic​ and the Sworld+tariffSworld+tariff​ curves (125 000 units).
• The domestic quantity demanded is at the intersection of the DdomesticDdomestic​ and the Sworld+tariffSworld+tariff​ curves (275 000 units).
• The quantity of imports is the difference between domestic quantity demanded and supplied (275 000 $-$ 125 000 = 150 000 units).

Choices A, B, and D are incorrect because they confuse pre-tariff figures with post-tariff figures for at least one of the variables.

Choice A is incorrect as a rise in FDI into the US would increase demand for dollars.

Choice C is wrong because a consistently low inflation rate would make US exports more competitive over time, increasing demand for the dollar.

Choice D is wrong as higher interest rates would attract demand for the US dollar.

Explanation​:
After granting the subsidy, the world price remains the same, but the price domestic producers receive increases. This means that consumers continue to pay $\text{\$}$4 but the government grants an additional $\text{\$}$3 to domestic producers for every unit sold. Therefore option A is false.

Options B, C, and D are true because a subsidy does encourage production and so domestic quantity supplied increases while quantity of imports decreases. Also, domestic quantity demanded remains unchanged because the price consumers pay remains the same.

Explanation​:
Invisible exports refers to the export of services. If a Korean tourist spends money on his meals in a restaurant, then the restaurant provides services to the Korean; hence, it is an invisible export for the US.

Options A, B, and D are incorrect:

• Option A purchasing a firm is not a service and if an American firm purchases a British firm, it is recorded as foreign direct investment in the BOP of the US
• Option B sending aid is a current transfer and not a service
• Option D receiving dividends is a component of net incomes

Explanation​:  D is the incorrect statement. Foreign investors buy more Malaysian investments due to the increased interest rates. Consequently, the supply of foreign currency increases (S1​ to S2​) as they exchange foreign currencies for Malaysian ringgit.

A and B are consistent with a rise in Malaysian interest rates. The cost of loanable funds is interest rates; increased interest rates disincentivise borrowing by Malaysian firms and households, leading to a decline in investment and consumption expenditures.

C is consistent with the view that British investors are attracted to higher interest rates because of higher investment returns.

Explanation​:
C is correct because an overvalued currency's exchange rate is kept artificially high, above the equilibrium in a floating exchange rate regime.

A and B are incorrect because they imply appreciation or depreciation, not overvaluation.

D is wrong because it defines an undervalued currency.

Explanation​:
Devaluing the currency would increase the volume of exports and decrease the volume of imports. Assuming the Marshall-Lerner condition is met, this will increase the value of (X-M), which increases AD, which increases employment.

Choice A is incorrect as stimulating AD will increase the price level.

Choice B is incorrect as there is no direct relationship between currency value and income/wealth inequality.

Choice D is incorrect as devaluing the currency directly increases export volume and reduces import volume.

Explanation​:
There are 17 SDGs laid down by the United Nations in 2015 which need to be attained within 15 years i.e. by 2030.

Options A, B, and C are incorrect.

Explanation​:
Before the imposition of the tariff, 10 000 units were imported at the price of $\pounds 1$. After the imposition, 5 000 units are exported at the price of $\pounds 2$, with half of the revenue going to those foreign producers, and half to the government levying the tax.

£5000−£10000=−£5000

Explanation​:
Statement I: an argument for trade protection is infant industries may be unable to compete against cheap imports from abroad, so tariffs keep infant industries competitive until they are fully established.

Statement II: national security concerns are a commonly-cited argument for trade protection, especially in the case of drugs, weapons, and essential goods.

Statement III: tariffs can be used to counter dumping by other countries, which happens when they sell their product at prices below cost as a way of getting rid of their surplus. This is unfair to domestic industries who may not be able to compete.

Statement IV: Less choice for consumers is an argument against trade protection, as it creates less variety in the imports of goods that are made available to domestic consumers.

Explanation​:
Choice (I) When the peso depreciates, Filpino exports become relatively cheaper, while imports become relatively more expensive. An increase in net exports shifts the aggregate demand curve to the right causing demand-pull inflation.

Choice (II) An increase in the cost of imported inputs increases production costs, shifting the short-run aggregate supply curve to the left, increasing the average price level and decreasing real GDP in equilibrium.

Choice (III) Depreciation should improve the trade balance, increasing aggregate demand.

Choice (IV) Depreciation raises the cost of imported inputs, decreasing aggregate supply.

Explanation​:
The Human Development Index (HDI) is a measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable, and having a decent standard of living.

Choice B is correct because Kiribati's higher mean years of schooling, possibly from greater education expenditures, result in a higher HDI than Honduras.

Choices A & C are incorrect because they suggest factors that would lead to a lower HDI for Kiribati compared to Honduras.

Choice D is incorrect because Honduras' life expectancy is higher than Kiribati's even though Kiribati spends a higher percentage of GDP on healthcare. Therefore, spending on healthcare does not contribute to Kiribati's higher HDI.

Explanation​:
After implementing the quota, the consumer surplus decreases by b+d+e+g+h+i. Area $b$ is taken by domestic producers. Area $d+e+g$ is taken by importing (foreign) producers. This leaves $h+i$ as the deadweight loss.

Explanation​:
While FDI may create job opportunities, these jobs can often be low-skilled positions, as FDI managers often keep the high-skilled positions for recruits from the home country. This prevents training of local workforce and minimizes the chances of improving the host country's human capital.

Choices A, B, and D are advantages of FDI for the host country.

Explanation​:
Statements I and II: the IHDI value equals the HDI value when there is no inequality across people

Statements III and IV: the IHDI $\text{‘}$discounts' each HDI dimension's average value according to inequalities in that dimension, so IHDI falls below the HDI value as inequality rises

Explanation​:
The current account is the sum of the following values:

• exported goods - imported goods
• exported services - imported services
• net current transfers
• net incomes

Plugging in the given values:

Balance on current account = 450 −120−500 = −$170 million

The following options apply the formula incorrectly and include the capital transfers (a component of the capital account):

• Option B is calculated as 450−500+120+45
• Option C is calculated as 450−120+45
• Option D is calculated as 450−120−500+45