Explanation​:
Statement I: tariffs in this scenario will be an anti-dumping measure to counter Protopia’s dumping of its products at below-cost prices.

Statement II: Econland’s tariffs are a response to Protopia’s unfair competition, and many economists would argue that tariffs in this case are justifiable.

Statement III: Econland’s tariffs are used to counter Protopia’s dumping and will thus protect domestic jobs in those industries harmed by Protopia’s actions.

Statement IV: Trade protection leads to a misallocation of resources, even when in response to dumping by a trade partner. Countries can utilize diplomacy and political pressure to prevent dumping, rather than resort to tariffs.

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​: 

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​:  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​:
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.

Choices A, C, and D are possible drawbacks of such policies: they are expensive and may place an unsustainable burden on national debt, they involve long time-lags, and the increased government spending may create inflationary pressures in the economy.

Key idea​:
An external balance refers to a sustained situation where imports of goods and services are roughly equal to exports of goods and services.

Explanation​:
Choice A is correct as contractionary monetary policy in the form of higher interest rates has the following effects:

• disincentivises borrowing by households and firms, lowering consumption spending and domestic investment
• lowering aggregate demand and real GDP
• decreasing imports as AD falls, improving the trade balance
• lowers the average price level, lowers the relative price of exports, increases the relative price of imports, improving the trade balance
• as the trade balance improves, the current account improves and moves toward an external balance

Choices B and D are incorrect because contractionary monetary policy shifts the aggregate demand curve to the left, lowering real GDP in equilibrium.

Choice C is incorrect because although both aggregate demand and real GDP will indeed decrease, it is inaccurate that net exports will also fall, leading to a deterioration of the external balance.

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​:
The WTO aims at liberalising trade and discourages trade protection.

The WTO’s stated goals include choices A, B, and C.

Explanation​:

Domestic producer surplus is the area above the Sdomesticdomestic​ curve and below P2​.

Domestic consumer surplus is the area below the Ddomesticdomestic​ curve and above P2​.

Choices A, B, and C confuse pre-tariff and post-tariff areas:

• Area $g$ is the pre-tariff domestic producer surplus
• Area a+b+c+d+e+f is the pre-tariff consumer surplus

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.

To devalue its currency, the country must:

• Sell the domestic currency, which increases its supply on foreign exchange markets. This eliminates choices A and B.
• Buy pounds. This causes demand for the pound to increase, causing it to appreciate against the local currency. This eliminates choice C.

Explanation​:
The HDI is a composite indicator measuring economic development across three dimensions:

• Standard of living, measured by GNI per capita (PPP) (Choice B)
• Education, measured by mean years of schooling (Choice C) and expected years of schooling
• Health, measured by life expectancy at birth (Choice D)

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

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.

Statement II: this is another downside because these policies are expensive and entail a huge opportunity cost

Statement III: this is a positive effect of these policies are they will help potential export industries to expand and employ more workers

Statement IV: this is a positive effect of such policies because those potential export industries will compete against industries from foreign countries and this will encourage them to be more efficient

Explanation​:
III would close the gap in SDG 1 (End poverty in all its forms everywhere)
IV would close the gap in SDG 2 (End hunger, achieve food security and improved nutrition and promote sustainable agriculture)
V would close the gap in SDG 4 (Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all)
VI would close the gap in SDG 6 (Ensure availability and sustainable management of water and sanitation for all)

I would worsen income inequality as increasing VAT is regressive
II may improve business confidence and investment but is not a guarantee of an improved standard of living because of the possibility of “jobless growth”.

Explanation​:
Domestic producers' equilibrium price is below the world market price, so they are able to export Q1​Q3​ at price P2​.

Choice A is wrong as P2​ is the allocatively efficient world price. Deviating away from it would incur a loss of economic welfare.

Choices B and D are wrong as Q1​Q3​ is exported.

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​:
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​:
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​:
Statement I: Trading partners often retaliate with their own forms of trade protection and this may set off a trade war.

Statement II: Tariffs and other forms of trade protection often lead to higher prices and create a welfare loss, thus resulting in an inefficient global allocation of resources.

Statement III: Protecting domestic jobs is a commonly cited argument for trade protection, because competition against lower-priced imports can lead to job losses in domestic industries.

Statement IV: If trading partners retaliate with their own trade protection measures then the country’s exports will be more expensive and less competitive, not more competitive.

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

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​:
(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.