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

The growth in Rwanda's population can provide several economic benefits:

1. Increased Labor Force: A growing population can lead to a larger labor force, which enhances productivity and economic output. More workers can stimulate growth in various sectors such as agriculture, manufacturing, and services.

2. Market Expansion: A larger population increases domestic demand for goods and services. This can encourage local businesses to expand their production and potentially attract foreign investment to meet the rising demand.

When assessing the change in aid received between 2017 and 2018, consider the effects of both receiving additional aid or experiencing a decline. If aid increased, it could lead to:

• Enhanced Development Projects: Increased funds could be funneled into development projects, improving infrastructure and public services.
• Economic Stability: Greater aid can provide more financial stability in turbulent times, helping to cushion the economy against external shocks.

Conversely, if there was a decline in aid:

• Reduced Capacity for Growth: Less aid could hamper development projects and social services, potentially limiting economic growth.
• Increased Dependency: A reduction in external funding may lead to increased reliance on foreign assistance.

An increase in the import price of second-hand clothes will likely lead to:

1. Higher Prices for Consumers: As the cost of importing these clothes rises, retailers may pass these costs onto consumers, leading to increased prices for second-hand clothing in Rwanda.

2. Impact on Clothing Manufacturers: Local manufacturers might find an opportunity to expand if second-hand clothing becomes too expensive for consumers, spurring demand for locally produced garments.

   To illustrate:

   • A supply and demand diagram can show a leftward shift of the supply curve for second-hand clothes, raising prices and leading to a potential decrease in the quantity demanded.

The Rwandan government could implement several policies to enhance its manufacturing sector:

1. Subsidies for Local Businesses: Providing financial support to local manufacturers can lower production costs and promote growth.

2. Investment in Infrastructure: Improving infrastructure, such as transportation and power supply, can facilitate manufacturing processes by making it easier to acquire raw materials and distribute products.

3. Skills Development Programs: Investing in education and training can equip workers with the necessary skills to meet manufacturing demands, fostering better job opportunities.