Question:

4 In 2021, the US had a trade in goods deficit on the current account of its balance of payments.
The US has many firms in a wide range of industries. Import tariffs are used to protect some of
these industries. The US government’s higher spending on healthcare, which reached $797bn
that year, also affected many of the country’s industries.
(a) Define a trade in goods deficit. [2]
(b) Explain two ways firms can be classified. [4]
(c) Analyse why a government may protect its country’s industries from foreign competition. [6]
(d) Discuss whether or not a government should increase its spending on healthcare. [8]

Sample Answers: