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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
Using the data in Figures 1 and 2, calculate the change in the level of total aid funding to Rwanda between 2011 and 2012.
Answer
To calculate the change in total aid funding, refer to Figure 1, which shows aid funding amounts in US dollars. In 2011, Rwanda received approximately 133.
The change can be calculated as follows:
Change = Aid funding in 2012 - Aid funding in 2011 Change = 123 = $10
Thus, there was a $10 increase in per capita aid funding from 2011 to 2012.
Step 2
With reference to the information provided, examine two likely benefits for the Rwandan economy of the growth in the country’s population.
Answer
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Increased Labour Supply: A growing population often translates to a larger workforce. This can enhance productivity as more individuals are available to fill roles across various sectors, including agriculture and services. With an adequate investment in education and skills training, this demographic advantage can lead to significant economic growth.
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Greater Consumer Market: A larger population can stimulate demand for goods and services. Increased domestic consumption can drive local businesses to expand, fostering an environment conducive to entrepreneurship and innovation. This growth in market size can attract both local and foreign investments.
Step 3
With reference to the information provided, assess the likely impact on the Rwandan economy of the change in aid received between 2017 and 2018.
Answer
The data from the source indicates that there was a variation in aid received between 2017 and 2018. A reduction in aid can lead to several implications for the Rwandan economy:
- Economic Contraction: Lower aid inflows could lead to reduced government spending on social services, impacting health and education sectors negatively.
- Investment Cutbacks: With decreased funding, infrastructure projects may slow down, hindering growth potential and development initiatives that rely heavily on foreign assistance. This reduction might stifle the economy’s ability to maintain growth rates.
Step 4
Discuss the likely impact on Rwandan consumers and clothing manufacturers of the increase in the import tariff on second-hand clothes. Use an appropriate diagram to support your answer.
Answer
The increase in import tariffs will impact Rwandan consumers and clothing manufacturers in several ways:
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For Consumers: Higher tariffs will lead to increased prices for second-hand clothing, causing consumers to either reduce their purchases or seek cheaper alternatives. This could reduce overall consumer spending in the clothing sector, limiting choices.
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For Manufacturers: Local manufacturers could benefit from reduced competition from imported goods, enabling them to capture a larger share of the clothing market. However, they may also face challenges in scaling up production to meet increased local demand, which requires investment in infrastructure.
Diagram: A supply and demand diagram demonstrating how an increase in tariffs raises prices and affects the quantity demanded and supplied in the market. The leftward shift in supply due to tariff increases reflects the reduced supply of second-hand clothes.
Step 5
Discuss policies, other than import tariffs, that the Rwandan government could use to develop its manufacturing industries.
Answer
To foster growth in the manufacturing sector, the Rwandan government can adopt various policies:
- Investment in Infrastructure: Enhancing transport, energy, and communication networks will ease the movement of goods and lower production costs for manufacturers.
- Subsidies and Grants: Providing financial support to local manufacturers can spur innovation and growth, enabling businesses to compete effectively against imports.
- Training Programs: Establishing vocational training initiatives can ensure a skilled workforce, aligning workers' skills with industry needs and boosting productivity.
- Trade Agreements: Pursuing advantageous trade agreements may open new markets for Rwandan manufactured goods, further stimulating economic growth.