Question 1

(a) Globalisation has meant that countries are increasingly dependent on each other. The current coronavirus pandemic has had a significant immediate impact on all economies.

Discuss the potential trade effects and channels through which the pandemic can affect a developing economy such as South Africa.

(b) Evaluate the validity of the statement below:

If Ghana is better at producing commodity X and commodity Y than Kenya, then Ghana is better off not trading with Kenya.

NB: Your evaluation of the validity of the above statement must be based on the theory that supports the statement and the theory that contradicts the statement. All assumptions and criticisms must be included in your discussion.