Q7 - Economist: Owing to global economic forces

[mshinners]

Question Type:
Explain a Result

Stimulus Breakdown:
The economy has shifted from manufacturing to service. The country has seen a decrease in international trade.

Answer Anticipation:
There's been a shift in two different areas, so the correct answe will just link both shifts. Either manufacturing is more exportable than services, or services are less exportable than manufactured goods.

Correct answer:
(C)

Answer choice analysis:
(A) The situation requires there to be a difference between manufactured goods and services to explain why a shift from one to the other had an impact on international trade. This answer choice brings up a similarity between the two, and we need a difference.

(B) Out of scope. This answer choice does not speak to exports.

(C) Bingo. While this answer doesn't explicitly mention manufactured goods, the fact that they're transportable is exactly the type of "common sense" info you're allowed to bring into the exam. This answer states services are different - they're delivered in person, locally, which would explain why exports have gone down as this country has shifted to a service-based economy.

(D) Out of scope. This answer doesn't speak to the impact on international trading, and unemployment isn't relevant to the reconciliation of these facts.

(E) Degree. "Some services" doesn't necessarily cover enough of them to explain a general trend. This answer also neglects to mention why manufacturing is different in this regard - it seems as if some manufactured goods would also be cheaper from local companies, so the shift still isn't explained.

Takeaway/Pattern:
Explain a Result questions often talk about changes. When there are two changes that need to be explained, look for an answer that connects those changes.

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