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Trade and aid in Rwanda 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
Trade and aid in Rwanda Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012. (b) With referen... show full transcript
Worked Solution & Example Answer:Trade and aid in Rwanda 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
From Figure 1, the aid funding received by Rwanda in 2011 was approximately 97 per capita.
To calculate the change:
Change = 2012 Aid - 2011 Aid = 123 = -$26
Thus, the total change in the level of aid funding to Rwanda from 2011 to 2012 is a decrease of $26 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 Force: A growing population can lead to a larger labor force, which may contribute to increased productivity and economic output. This can drive economic growth, as more people are available to work in various sectors.
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Enhanced Market Size: An increasing population expands the domestic market. With more consumers, demand for goods and services rises, which can stimulate local businesses and attract foreign investment.
Step 3
Assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.
Answer
Considering the aid funding from 2017 to 2018, if aid decreased, the Rwandan economy might experience challenges such as reduced public spending on essential services like healthcare and education. This could hinder development and growth. Conversely, if aid increased, it may provide additional resources for infrastructure development and social programs, supporting economic growth.
Step 4
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the import of second-hand clothes.
Answer
The increase in second-hand clothing imports is likely to have mixed effects:
- Impact on Consumers: Rwandan consumers may benefit from lower prices on second-hand clothes, increasing access to affordable clothing options.
- Impact on Manufacturers: Local clothing manufacturers may face stiff competition and reduced market share, leading to potential job losses.
Using an appropriate supply and demand diagram, the reduced price of second-hand clothing might shift the demand curve in favor of imported goods, potentially leading to decreased demand for locally produced garments.
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 Businesses: The government can provide financial assistance or subsidies to local manufacturers to lower production costs and enhance competitiveness.
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Investment in Infrastructure: Improving infrastructure such as transportation and utilities can facilitate easier distribution and production processes for manufacturers.
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Training Programs: Implementing vocational training programs can enhance the skill set of the workforce, making it more suitable for manufacturing jobs.
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Tax Incentives: Offering tax breaks or incentives for companies investing in manufacturing can promote growth within the sector.