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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 aid funding, we first reference Figure 1:
- Aid funding received in 2011: $123
- Aid funding received in 2012: $110
To compute the change:
Change = Aid in 2012 - Aid in 2011 = 110 - 123 = -13
Therefore, the total aid funding to Rwanda decreased by $13.
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 Force: A growing population can lead to a larger labor force, which may boost productivity and economic development. More workers can mean more goods and services produced, contributing to GDP growth.
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Consumer Market Expansion: An increasing population enlarges the consumer base. This can lead to greater demand for products and services, encouraging businesses to expand and invest in local markets, which can further stimulate economic growth.
Step 3
Assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.
Answer
Between 2017 and 2018, there was a notable decrease in aid funding according to Figure 1. This could indicate:
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Economic Strain: A decrease in aid often constrains government budgets for infrastructure and development projects, potentially leading to slower economic growth.
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Dependency on Aid: The reduction may also expose the extent of Rwanda's dependency on external funding, stressing the need for the country to develop sustainable economic practices independent of aid.
Step 4
Discuss the likely impacts on Rwandan consumers and clothing manufacturers of the increase in the import tariffs on used second-hand clothes.
Answer
The increase in import tariffs on second-hand clothes could have several impacts:
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For Consumers: Higher tariffs may lead to increased prices for second-hand clothing, making it less affordable for lower-income families. This could result in reduced consumer purchasing power and a shift towards cheaper, lower quality alternatives.
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For Manufacturers: Local clothing manufacturers might benefit from reduced competition from imported second-hand goods. This may encourage local production, but they will need to ensure that products are affordable and of good quality.
An appropriate supply and demand graph would illustrate how the tariffs raise prices and potentially decrease the quantity of second-hand clothes consumed, while increasing 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 consider several policies:
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Investment in Infrastructure: Improving transport and energy infrastructure could help manufacturing firms reduce costs and enhance productivity.
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Subsidies for Local Industries: Providing financial incentives for local manufacturers can help them compete against imports and encourage domestic production.
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Training Programs: Establishing vocational training programs focused on manufacturing skills can support workforce development, addressing skill gaps in the labor market.
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Innovation Tax Credits: Offering tax credits for companies investing in research and development could stimulate innovation within the manufacturing sector.