AQA Economics - Paper 2 - Economic Development d d d d d d d d
Exam Questions With Mark Scheme d d d d
What is the difference between economic growth and development? - ANSWER:Economic
d d d d d d d d d d d
Development is not economic growth d d d d d
Growth is simply an increase in GDP
d d d d d d
Development is a normative concept involving value judgements about things such as living
d d d d d d d d d d d d d
standards and general welfare and how they changed over time in a country
d d d d d d d d d d d d
The method to measure these involves the size of a country's economy but also size and health
d d d d d d d d d d d d d d d d d
of population as well as the quality of their lives.
d d d d d d d d d d
When measuring development you must not just assess the amount of economic growth but
d d d d d d d d d d d d d d
also the effects the growth may have had on the people.
d d d d d d d d d d d
For example: Growth due to increased scale of production could cause more pollution which
d d d d d d d d d d d d d d
would negatively affect peoples lives. Development would be growth in access to clean water
d d d d d d d d d d d d d d
for example, as it benefits the largest part of the population.
d d d d d d d d d d
Why is PPP needed when looking at GNI per capita? - ANSWER:Different values buy different
d d d d d d d d d d d d d d d
things in different countries.
d d d
Why is GPI (Genuine Progress Indicator) better than GDP or GNI? - ANSWER:Takes into account
d d d d d d d d d d d d d d d
conséquences of growth e.g. pollution and volunteer work which helps quality of life but isn't
d d d d d d d d d d d d d d d
included in GDP d d
, What does the HDI account for? - ANSWER:Education (years of schooling), health (life
d d d d d d d d d d d d d
expectancy) and standard of living (GNI per capita). Doesn't capture all info relevant to people's
d d d d d d d d d d d d d d
lives but does more than just consider economic growth
d d d d d d d d d
What is relative poverty and social exclusion? - ANSWER:Relative poverty is not necessarily
d d d d d d d d d d d d d
being below the poverty line (absolute poverty) but is more being poorer than the other
d d d d d d d d d d d d d d d
citizens in one's country. Social exclusion refers to not having all opportunities needed to fully
d d d d d d d d d d d d d d d
participate in society such as lacking employment opportunities and health care.
d d d d d d d d d d
Why is inequality a constraint on development in some LEDC's? - ANSWER:Lacking the assets to
d d d d d d d d d d d d d d
be eligible for loans (assets used as collateral to ensure security of loans of loans for the bank)
d d d d d d d d d d d d d d d d d d d
means that people will be unable to obtain the resources to invest in a company which will
d d d d d d d d d d d d d d d d d
constrain them for starting a business. Others say inequality is needed for development as it
d d d d d d d d d d d d d d d
provides incentives to work and I necessary for capitalism to function.
d d d d d d d d d d
What are some important factors of inequality? - ANSWER:Wages, healthcare, education,
d d d d d d d d d d d
quality of accommodation, unemployment levels, tax levels, laws regarding property ownership
d d d d d d d d d d
and inheritance and the level of government benefits
d d d d d d d d
How can a LEDC's attract FDI with poor infrastructure? - ANSWER:Many LEDC's lack
d d d d d d d d d d d d d
competitiveness due to poor infrastructure e.g. unreliable energy supplies and poor transport
d d d d d d d d d d d d
links. If an LEDC has important raw materials it could still attract FDI
d d d d d d d d d d d d
What is the problem of the 'savings gap?' - ANSWER:Th gap between domestic savings and
d d d d d d d d d d d d d d d
investment needed to develop the economy in question. d d d d d d d
What other factors limit investment in LEDC's? - ANSWER:Capital flight (savings abroad) less tax
d d d d d d d d d d d d d
revenue, past borrowing and interest payments to finance, foreign currency gap - more capital
d d d d d d d d d d d d d d d
outflows than inflows, likely if a country is dependant on primary product exports and
d d d d d d d d d d d d d d
manufactured goods being imported. Improvements and investment in property owned by
d d d d d d d d d d d
people is also low if property rights are absent.
d d d d d d d d
Exam Questions With Mark Scheme d d d d
What is the difference between economic growth and development? - ANSWER:Economic
d d d d d d d d d d d
Development is not economic growth d d d d d
Growth is simply an increase in GDP
d d d d d d
Development is a normative concept involving value judgements about things such as living
d d d d d d d d d d d d d
standards and general welfare and how they changed over time in a country
d d d d d d d d d d d d
The method to measure these involves the size of a country's economy but also size and health
d d d d d d d d d d d d d d d d d
of population as well as the quality of their lives.
d d d d d d d d d d
When measuring development you must not just assess the amount of economic growth but
d d d d d d d d d d d d d d
also the effects the growth may have had on the people.
d d d d d d d d d d d
For example: Growth due to increased scale of production could cause more pollution which
d d d d d d d d d d d d d d
would negatively affect peoples lives. Development would be growth in access to clean water
d d d d d d d d d d d d d d
for example, as it benefits the largest part of the population.
d d d d d d d d d d
Why is PPP needed when looking at GNI per capita? - ANSWER:Different values buy different
d d d d d d d d d d d d d d d
things in different countries.
d d d
Why is GPI (Genuine Progress Indicator) better than GDP or GNI? - ANSWER:Takes into account
d d d d d d d d d d d d d d d
conséquences of growth e.g. pollution and volunteer work which helps quality of life but isn't
d d d d d d d d d d d d d d d
included in GDP d d
, What does the HDI account for? - ANSWER:Education (years of schooling), health (life
d d d d d d d d d d d d d
expectancy) and standard of living (GNI per capita). Doesn't capture all info relevant to people's
d d d d d d d d d d d d d d
lives but does more than just consider economic growth
d d d d d d d d d
What is relative poverty and social exclusion? - ANSWER:Relative poverty is not necessarily
d d d d d d d d d d d d d
being below the poverty line (absolute poverty) but is more being poorer than the other
d d d d d d d d d d d d d d d
citizens in one's country. Social exclusion refers to not having all opportunities needed to fully
d d d d d d d d d d d d d d d
participate in society such as lacking employment opportunities and health care.
d d d d d d d d d d
Why is inequality a constraint on development in some LEDC's? - ANSWER:Lacking the assets to
d d d d d d d d d d d d d d
be eligible for loans (assets used as collateral to ensure security of loans of loans for the bank)
d d d d d d d d d d d d d d d d d d d
means that people will be unable to obtain the resources to invest in a company which will
d d d d d d d d d d d d d d d d d
constrain them for starting a business. Others say inequality is needed for development as it
d d d d d d d d d d d d d d d
provides incentives to work and I necessary for capitalism to function.
d d d d d d d d d d
What are some important factors of inequality? - ANSWER:Wages, healthcare, education,
d d d d d d d d d d d
quality of accommodation, unemployment levels, tax levels, laws regarding property ownership
d d d d d d d d d d
and inheritance and the level of government benefits
d d d d d d d d
How can a LEDC's attract FDI with poor infrastructure? - ANSWER:Many LEDC's lack
d d d d d d d d d d d d d
competitiveness due to poor infrastructure e.g. unreliable energy supplies and poor transport
d d d d d d d d d d d d
links. If an LEDC has important raw materials it could still attract FDI
d d d d d d d d d d d d
What is the problem of the 'savings gap?' - ANSWER:Th gap between domestic savings and
d d d d d d d d d d d d d d d
investment needed to develop the economy in question. d d d d d d d
What other factors limit investment in LEDC's? - ANSWER:Capital flight (savings abroad) less tax
d d d d d d d d d d d d d
revenue, past borrowing and interest payments to finance, foreign currency gap - more capital
d d d d d d d d d d d d d d d
outflows than inflows, likely if a country is dependant on primary product exports and
d d d d d d d d d d d d d d
manufactured goods being imported. Improvements and investment in property owned by
d d d d d d d d d d d
people is also low if property rights are absent.
d d d d d d d d
