Observation

This question was popular among the candidates.  Their performance was very good.  However, some candidates stated the hindrances of international trade like difference in currency, language etc instead of disadvantages as required in the question.

The expected responses to the question include:

(a)        Entrepôt trade involves the importation of goods from one country and
re-exportation of the goods to another country. 
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(b)        (i)         Advantages of International Trade:

• International trade widens the market for goods;
• It avoids wastage because countries can dispose off the goods they have in excess;
• It improves standard of living because countries can enjoy what they cannot produce;
• It creates more jobs as in transporting, selling, manufacturing because of the need to increase production to meet foreign demands;
• It brings about specialization and mass production which in turn results in lower unit cost of the product;
• It generates revenues for the countries involved;
• It foster international relations;
• It encourages transfer of technology;
• It promotes economic development.

                        (ii)        Disadvantages of International trade:

• It kills local industries whose products cannot compete with those from developed countries;
• It puts country into perpetual dependency on foreign goods;
• It leads to dumping;
• It may lead to importation of harmful goods;
• It creates unemployment in importing countries;
• It leads to unfavourable balance of payment.