Directions: Write a brief answer (one to three complete sentences) to each of the questions. Pay attention to the words, grammar and sentence structure in your answers.

1. In spite of the difficulties of predicting future trends in world trade, we can specify factors that will be important. Some of these are: population growth; possible scarcity of commodities, the food and energy situation, relations with the Third World (developing nations), pressures to preserve the environment, and international cooperation on political, social, economic, and monetary problems.
2. If population growth continues at its present pace, the future balance between food demand and supply may become dependent on new dietary patterns. Reduced consumption of meat, increased use of new high protein food made from soybeans, and development of ocean resources for food are some alternatives that must be considered.
3. As the population grows, prices of commodities will fluctuate. As countries endeavor to increase yields on existing croplands through intensified use of water, energy, and fertilizers, the cost of commodities will rise.
4. Growth of trade will depend greatly on availability of energy sources. There may still be a trillion barrels of recoverable oil in the Middle East. But the oil crisis of 1974 has led to renewed interest in coal and to a search for alternative sources of energy. Solar, geothermal, and nuclear energy will play a large role in the years to come.
5. Solar energy is available in various forms. Buildings can be heated and cooled by direct use of solar radiation, crops and trees, which are the most efficient converters of sunlight into energy, can be grown for their energy potential, wastes can be burned as fuel, sunlight can be converted into DC (direct current) electricity, electric power can be derived from the sun-warmed surface waters of the ocean (ocean thermal power), lastly, solar radiation can be converted to heat that will drive electric power generators (solar thermal power). Serious problems still remain as to transportation and storage of solar energy.
6. Geothermal energy is the energy contained within the earth. Heat is abundantly available deep in the earth’s core and is constantly being produced. However, this heat is usually located at too deep a level for commercial exploitation. Sometimes heat comes to the surface in the form of lava and geysers. In short, very little is know on the use of geothermal energy, and it has barely been exploited.
7. Nuclear energy is produced in nuclear power plants. At these plants atoms of uranium are split, thus releasing masses of energy. Another source of energy under development is the nuclear fusion of certain atoms of hydrogen. This could eventually replace natural gas as a source of energy.
8. In future trade the key development to watch is the relationship between the industrialized and the developing nations. Third World countries export their mineral deposits and tropical agricultural products, which bring them desired foreign exchange. Tourism has also been greatly responsible for the rapid development of some developing nations. Many Third World nations with high unemployment and low wages have seen an emigration of workers to the developed nations. Western Europe has received millions of such workers from Mediterranean countries.
9. The developing nations profit when these workers bring their savings and their acquired technical skills back home. Many developing nations benefit when Western nations establish manufacturing in their countries to take advantage of cheap labor.
10. As economies mature, economic growth rates tend to level off. The rate of population growth is leveling off today in Western nations. This leveling-off eventually leads to static non-growth markets. A point of saturation sets in—technology and innovation have seemed to achieve the impossible, but then how much further can it go? Herman Kahn, in his book The Next 200 Years, says that a shift in priorities will have to occur for industrialized nations. No longer is the creation of money and jobs essential, it is rather the improvement of the quality of life that must be our concern. Today pollution is of major concern for industrialized nations. Environmentalists are worried about the relationship between industrial objectives and preserving the environment. In developing nations, however, the problem of pollution is ignored for the sake of development.
11. The Western World will eventually move to a period of relatively low economic growth, coupled with a high rate of unemployment. A so-called welfare society will emerge. The unemployed in the new welfare society will be taken care of by the employed through generous contributions to the social welfare system.
12. Political questions remain as to the world’s future. We can only speculate as to whether organized markets such as the Common Market and COMECON could eventually merge. In the present political climate, this would seem impossible, although some cooperation agreements are already in effect. Obviously a merger between the Western and Eastern European markets would greatly enhance world trade.
13. International monetary cooperation will have a significant impact on future trade. If the IMF countries are not able to agree upon a new international monetary order in the years to come, international trade may become too risky for some companies to get involved in . If the IMF is unable to create sufficient international liquidity reserves in the future, there may not be enough liquidity to sustain growth in trade.
14. However, growing international consultation and cooperation in economic, monetary, and political matters will certainly contribute to the flourishing of world trade for years to come.