CIMA Fundamentals of Business Economics BA1 Question # 116 Topic 12 Discussion

CIMA Fundamentals of Business Economics BA1 Question # 116 Topic 12 Discussion

BA1 Exam Topic 12 Question 116 Discussion:
Question #: 116
Topic #: 12

Country X is a country highly reliant on its oil exports. However, in recent months, oil prices have fallen by 20%. It is located near Country Y, an oil exporter which is a member of a trading bloc. Country X has some coal reserves, but faces stiff competition from Country Z, a member of the trading bloc, which also exports coal.

Which of the following would be the most effective way for the government to alleviate these circumstances?

Select ALL that apply.


A.

Purchase oil produced within the country in order to support the domestic oil industry


B.

Invest in retraining those working in the oil industry so they can enter other domestic industries which are currently more profitable


C.

Dump its oil exports into the trading bloc by exporting the oil at an artificially low price


D.

Begin extracting and exporting coal as a substitute for oil


E.

Allow the oil industry in Country X without any further investment to fail as it is a sunset industry


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