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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 aid funding to Rwanda between 2011 and 2012
Answer
From Figure 1, the aid funding received by Rwanda in 2011 was 91 USD per capita and in 2012 it was 97 USD per capita. To calculate the change:
Thus, the change in the level of total aid funding to Rwanda between 2011 and 2012 is 6 USD per capita.
Step 2
Examine two likely benefits to the Rwandan economy of the growth in the country’s population
Answer
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Increased Labor Force: The growth in population increases the labor force available for various sectors, including agriculture, manufacturing, and services. This can lead to higher productivity and economic growth as more individuals enter the workforce.
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Market Expansion: A growing population signifies a larger domestic market for goods and services. This can attract investment and boost local businesses, which contributes to economic development.
Step 3
Assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018
Answer
The data shows a decline in aid received by Rwanda, which may result in a tighter budget for the government. This loss of funding could limit public investment in essential services such as education and healthcare, potentially hindering economic growth. Additionally, reduced aid could impact social programs, leading to greater poverty levels and associated economic challenges.
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 tariffs on second-hand clothing would likely lead to higher prices for imported clothes, making them less affordable for Rwandan consumers. This could reduce consumer spending on clothing, affecting overall demand. For local clothing manufacturers, this scenario could mean reduced competition from foreign products, providing an opportunity to capture a larger market share by meeting local demand.
Diagram: A supply and demand diagram can illustrate the shift in supply due to increased tariffs, showing a decrease in the supply of second-hand clothes and a new equilibrium at a higher price.
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 could provide financial assistance to local manufacturers to lower production costs and enhance competitiveness.
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Investment in Infrastructure: Improving infrastructure such as roads, electricity, and internet services can facilitate easier production and distribution, supporting manufacturing growth.
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Training and Education Programs: Offering training programs to equip the workforce with the necessary skills for manufacturing can enhance productivity and innovation in the sector.