Theory question 103
Foreign TradeCountry X established a Council that would be tasked with the responsibility of increasing the sale of local products in foreign markets.
(a) Name the organization formed by country X.
(b) State four functions that the organization named in 3(a) would perform.
(c) State five reasons country X engages in foreign trade.
Show the model answer
(a) Export Promotion Council.
(b) Any four: searches for and develops foreign markets for local products; organises participation in international trade fairs and exhibitions; gives information and advice to exporters on markets, standards and procedures; trains exporters; gives export incentives and helps with export finance; promotes the image of local products abroad; encourages production for export.
(c) Any five: to obtain goods it cannot produce; uneven distribution of natural resources; differences in climate; comparative cost advantage and specialisation; to sell surplus output; to earn foreign exchange; wider market and economies of scale; access to technology; to raise living standards; to improve international relations.
A council that promotes exports = Export Promotion Council.