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Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012 - Edexcel - A-Level Economics A - Question 6 - 2021 - Paper 2
Question 6
Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012. With reference to the information provide... show full transcript
Worked Solution & Example Answer:Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012 - Edexcel - A-Level Economics A - Question 6 - 2021 - Paper 2
Step 1
Calculate the change in the level of total aid funding to Rwanda between 2011 and 2012.
Answer
To determine the change in aid funding, we start by finding the aid received in 2011 and 2012 from Figure 1. In 2011, the aid funding received was approximately 106 per capita.
The change can be calculated as follows:
Thus, the change in aid funding is an increase of $6 per capita.
Step 2
Examine two likely benefits for the Rwandan economy of the growth in the country’s population.
Answer
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Increased Labor Supply: A growing population implies a larger workforce, which can enhance production capacity within various sectors. More workers can lead to increased economic activities and stimulate growth in the labor-intensive industries.
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Market Expansion: An increase in population also expands the domestic market, creating higher demand for goods and services. This can result in more investments and encourage businesses to produce additional products to meet the needs of a larger consumer base.
Step 3
Assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.
Answer
The reduction in aid received can lead to several potential impacts:
- Increased Budget Constraints: A decrease in aid could tighten government budgets, forcing essential projects to be delayed or cut, which might hinder development goals.
- Dependency Issues: If the economy is heavily reliant on aid, any reduction could lead to vulnerabilities, negatively affecting public services and economic stability.
Step 4
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the tariff on imports of second-hand clothes.
Answer
The increase in tariffs on second-hand clothing will likely lead to:
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Higher Prices for Consumers: Tariffs raise the overall cost of imported clothes, leading to higher retail prices. Consumers may find it difficult to afford necessary clothing, especially in lower-income brackets.
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Support for Local Manufacturers: Conversely, local clothing manufacturers may benefit, as a decrease in competition from cheap imports allows them to gain market share.
An appropriate diagram would illustrate the effect of the tariff on the supply curve, showing a shift to the left, which raises prices and reduces quantity for consumers while boosting local production.
Step 5
Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.
Answer
The Rwandan government could pursue the following policies:
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Investment in Infrastructure: Enhancing transport and logistics infrastructure can help reduce production costs and improve access to markets.
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Providing Financial Incentives: Offering subsidies or tax breaks to local manufacturers to encourage production and investment in the manufacturing sector.
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Skills Development Programs: Implementing vocational training programs can develop a skilled workforce tailored to the needs of the manufacturing sector.
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Promoting Research and Development: Encouraging innovation through research grants can help local industries to be competitive, allowing them to adapt to changing technologies and market demands.