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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. (b) With reference to the information pro... 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 calculate the change, we need to extract the values from Figure 1:
- Aid funding in 2011: 123 USD
- Aid funding in 2012: 115 USD
Change = Aid funding in 2012 - Aid funding in 2011
= 115 - 123 = -8 USD
This indicates a decrease in aid funding of 8 USD 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 leads to a larger workforce, which can boost productivity and economic growth by increasing the number of people available for employment.
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Larger Market for Goods and Services: With a rising population, there is an expansion in the potential market for goods and services, encouraging businesses to invest and grow, which can lead to improved economic conditions.
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 could significantly affect investment in public services, infrastructure, and social programs.
- Decreased Investment: A reduction in aid might lead to decreased funding for vital sectors such as education and healthcare, potentially hindering future economic growth.
- Increased Economic Vulnerability: With less foreign aid, Rwanda may become more reliant on domestic resources, making the economy more vulnerable to fluctuations in local markets.
Step 4
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the import tariffs on second-hand clothes.
Answer
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Impact on Consumers: Higher tariffs on second-hand clothes will likely increase prices for consumers, making clothing less affordable, especially for low-income households.
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Impact on Manufacturers: Local clothing manufacturers may benefit from reduced competition with imported second-hand clothes, potentially increasing their market share. This could encourage local production, though at a higher cost for consumers.
To illustrate this, a supply and demand diagram can be used to show the shift in supply curve due to tariffs, leading to higher prices and a decrease in the quantity of second-hand imported clothes.
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 Industries: The government can offer financial support to local manufacturers, enabling them to reduce costs and become more competitive.
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Investment in Infrastructure: Improving infrastructure, such as roads and electricity supply, can help manufacturers reduce operational costs and increase efficiency.
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Skill Development Programs: Providing training and education can help improve the skill levels of the workforce, making local industries more productive and innovative.