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Edexcel A-level EconomicsA exam practice answers

19: Emerging and developing economies

General principles for the 25-mark essay questions: A ‘levels-based’ marking scheme is used to assess answers. To achieve a Level 4 mark for knowledge, application and analysis (KAA) it is necessary to meet the criteria which include the following wording: ‘the answer demonstrates logical and coherent chains of reasoning’. However, as a guide, at least three points/issues should be identified and then analysed and evaluated.

1 / (a) / KN: 2 marks; AP: 2 marks; AN: 1 mark
KN and AN:
  • Population growing more rapidly than GDP, causing a fall in GDP per capita
  • Therefore, living standards were falling on average.
AP:
  • Example, or reference to data
/ (5)
(b) / KN: 2 marks; AP: 2 marks; AN: 2 marks
Evaluation: 2 marks
KAA:
Issues could include:
  • price fluctuations — analysis of price inelasticity of demand and supply and impact of shifts in S and D
  • producer revenue fluctuations — implications for planning investment and output
  • fluctuations in foreign currency earnings — constraint on importing capital goods
  • impact on political stability
Evaluation:
  • Examples of countries which have grown and developed on basis of oil production and exporting oil
  • Consideration of other constraints on growth and development
  • Prioritisation of factors discussed
/ (8)
(c) / KN: 2 marks; AP: 2 marks; AN: 4 marks
Evaluation: 4 marks
KAA:
Reasons include:
  • fall in FDI from developed economies
  • fall in demand for goods produced in sub-Saharan Africa
  • oil-rich countries suffered from fall in oil prices
  • commodity price crash
  • data reference
Evaluation:
  • Consideration of relative significance of each factor
  • Fall in FDI might be offset by increase in domestic investment
  • Fall in growth rate may be temporary if there is a rebound in commodity prices
/ (12)
(d) / KAA: 16 marks
Evaluation: 9 marks
KAA:
Significance for:
  • GDP growth and relevance for future growth: link to living standards and reduction in absolute poverty
  • employment
  • tax revenues for governments: opportunity to improve public services
  • FDI: reference to multiplier effect on GDP; significance for all of the above points
  • improvements in education, health services, ‘digital and financial inclusion’
  • appropriate data references in relation to above points
Evaluation:
  • Benefits may be spread unevenly, contributing to an increase in inequality
  • Employment opportunities may be limited, part-time or short-term only
  • Tax revenues may be used for military purposes and not to the benefit of much of the population
  • Global companies might repatriate profits resulting from FDI
/ (25)
(e) / KAA: 16 marks
Evaluation: 9 marks
KAA:
Measures could include:
  • industrialisation — Lewis model
  • development of tourism
  • outward-looking/market-led policies, e.g. trade liberalisation; allowing currency to depreciate; opening up of capital markets; removal of domestic subsidies (this could count as two strategies)
  • increase savings rate (Harrod–Domar model)
  • reduce red tape, making it easier for new firms to be established
  • increase property rights (Hernando de Soto)
  • aid from developed countries
  • debt cancellation
  • FDI
NB Answer should demonstrate a clear understanding of economic development.
Evaluation:
  • Industrialisation and tourism might result in increased inequality
  • External costs of industrialisation and/or tourism
  • Opportunity cost of industrialisation, e.g. availability of land to grow food
  • Discussion of problems associated with market-led strategies, e.g. domestic producers may be unable to compete; higher prices for basic necessities
  • Higher savings ratio is not a necessary condition for growth and development. Savings gap could be filled by FDI or aid
  • Strategies may be ineffective for geopolitical reasons, e.g. nearness to markets; political instability
  • Aid might be ineffective, e.g. because of corruption
/ (25)

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