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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 find the change in total aid funding to Rwanda between 2011 and 2012, we first extract the aid funding amounts from Figure 1:
- Aid funding in 2011: $123 per capita
- Aid funding in 2012: $96 per capita
Now, the change can be calculated as follows:
Change = Aid funding in 2012 - Aid funding in 2011
Change = 123 = -$27 per capita.
Thus, the total aid funding decreased by $27 per capita between 2011 and 2012.
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 leads to a larger labor force which can enhance productivity within the country. More workers can contribute to various sectors, ultimately providing support for economic growth and diversification.
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Increased Market Size: With a rising population, the domestic market for goods and services expands. This larger market can attract more businesses to invest in Rwanda, thereby stimulating economic development.
Step 3
Assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.
Answer
The change in aid received between 2017 and 2018 can significantly affect the Rwandan economy. A decrease in aid could lead to:
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Reduced Public Spending: Lower aid levels typically lead to cuts in public projects and essential services like education and healthcare, potentially hampering economic growth.
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Increased Borrowing: If aid decreases, the Rwandan government may resort to borrowing to finance budgets, leading to higher debt levels which might impact future economic stability.
Step 4
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the import tariff on second-hand clothes.
Answer
The increase in import tariffs on second-hand clothes will have several effects:
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For Consumers: Consumers may face higher prices for second-hand clothing, as the costs associated with imports will rise. This could lead to reduced purchasing power, particularly for lower-income families.
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For Manufacturers: Local clothing manufacturers may benefit from reduced competition from imported second-hand clothing. As the demand for new clothing rises, they might experience increased sales and growth opportunities, as illustrated in the accompanying diagram of supply and demand.
Step 5
Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.
Answer
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Subsidies for Local Manufacturers: The government could provide financial subsidies to local manufacturers to help reduce their production costs, making them more competitive against imports.
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Investment in Infrastructure: Improving infrastructure, such as transportation and energy supply, would facilitate smoother operations for manufacturers and attract foreign direct investment.
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Training and Skills Development: Initiatives that enhance the skills of the workforce would ensure that local industries are well staffed and can meet production demands efficiently.