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Mark Scheme Structured Question Econ G9

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7 views

Mark Scheme Structured Question Econ G9

Uploaded by

Kevin Lukito
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1(a) Primary-sector products.

e.g. coal, oil, fish, wood, wheat

1(b) Reasons why a country may change its specialisation.

 Change in quantity / quality of resources (1) discovery of new resources (1) or new technology (1) other
economies may be more / less efficient in production of certain products (1).
 Change in cost of production (1) change in labour costs
(1)e.g. increase in minimum wage (1) change in capital costs (1) e.g. cheaper technology (1)
 Changes in demand (1) changes in consumer behaviour
(1)change in revenue / profits (1)
 Changes in level of competition (1) other countries’ producers may gain a competitive advantage (1).
1(c) Analyse the economic benefits for a country in producing manufactured goods instead of primary sector products.

 higher price (1) higher output (1) higher revenues / profits


(1) higher value added (1)
 more exports (1) increased total demand (1) economic growth (1)
 higher productivity (1) economies of scale (1)
 more demand for workers (1) lower unemployment (1) may be more skilled jobs (1) higher income of workers
(1) higher standards of living / reduction in poverty (1)
 does not require stock of natural resources (1) skills / technology could be learnt / imported (1)
 less dependent on weather changes (1) more stable revenues / income (1) easier to plan / budget (1)
 higher tax revenues for the government (1) higher government spending (1) more development spending e.g.
healthcare services / education services / infrastructure (1) resulting in higher levels of economic
development (1).
1(d) Discuss whether or not labour-intensive production will harm an economy.
[EXPLAIN WHY IT MIGHT AND WHY IT MIGHT NOT)

Why it might:

 labour may cost more than capital


 labour may be more unreliable – inefficient / inconsistent.
 labour may be protected by trade unions – more disruptions
 labour may be less productive
 labour may need more breaks than machines
 labour intensive production may be less cost-effective, reducing international competitiveness.

Why it might not:

 provides high employment levels – high standards of living


 lower levels of unemployment – less government spending on unemployment benefits
 labour may be more flexible than machines – can change skills / production / more mobile
 labour may be able to respond to people / customers more easily.
2(a) Forms of money:
coins (1) bank notes / paper money (1) bank deposits / accounts (1) digital money (1).

2(b) Functions a central bank performs for its government.

The central bank acts as a banker for the government (1) it accepts tax payments to the government / provides
facilities for the government to make payments / manages the national debt / lends to the government (1).
It operates the government’s monetary policy (1) e.g. changing interest rates / to influence inflation (1).
It holds reserves of foreign currency (1) to influence the foreign exchange rate (1).
It manages the government’s debt (1) issuing government securities / paying interest on government securities
(1). It issues bank notes (1) influencing the money supply (1). It may regulate commercial banks / banking
system (1) to ensure they act responsibly (1).
It acts as a lender of last resort (1) lending to commercial banks / to prevent banks going out of business / a
financial collapse (1).
2(c) Why a government may have lower unemployment as its main aim.

Unemployment may be at a high level (1) unemployment is an inefficient use of resources / waste of resources
(1) not working at full capacity (1).
Lower unemployment would increase output / economic growth (1) raise incomes / GDP per head (1) increase
living standards (1) reduce poverty / more able to buy basic necessities (1) may reduce the crime rate (1) may
increase exports (1).
Lower unemployment will increase total demand / increase consumer spending / increase spending (1) increase
tax revenue (1) lower government spending on unemployment benefits (1) increase the government’s ability to
spend on (e.g. education) / reduce budget deficit / government spending on unemployment benefits involves an
opportunity cost (1).
Lower unemployment may reduce the chances of workers losing skills (1) being in work keeps workers up to
date with
e.g. advances in technology (1).
2(d) Discuss whether or not inflation will harm producers.
[EXPLAIN WHY IT MIGHT AND WHY IT MIGHT NOT)

Why it might:
 may increase costs of production – cost-push inflation –
reducing profit
 may reduce international competitiveness
 may cause menu costs
 may cause shoe leather costs
 may make it difficult to plan ahead.

Why it might not:


 may be demand-pull inflation, increasing firms’ revenue
 may be low and stable
 may be lower than other countries’ inflation rates, increasing price competitiveness
 may enable them to reduce real wages
 may increase tax revenue, some of which may be spent on e.g. subsidies
 cost of debt may fall / may be cheaper to borrow (in real terms)
 some producers may be making products with inelastic demand.

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