Edexcel A-Level Economics Theme 4 Study Guide Questions And Correct Answers

Factors influencing growth and development (11) {Ans: Primary product dependency Harrod-Domar Model Foreign currency gap Capital flight Demographic factors Debt Access to credit and banking Infrastructure Education/skills Property rights Non-economic factors}Demographic factors {Ans: High birth rate links with poverty and environmental damage}Measures to reduce poverty (5) {Ans: Income redistribution (e.g. inheritance tax) Sustained growth Progressive taxes (disincentive to work harder) Improve human capital Govt. spending on healthcare and education}Terms of trade equation {Ans: (Weighted average of export prices) x (Weighted average of import prices) x100}Significance of size of fiscal deficits and national debt (4) {Ans: Govt. borrowing increases demand for credit, increasing interest rates Govt. raises interest rates to encourage investors to buy bonds Higher taxes Crowding out effect}Components of international competitiveness {Ans: Price competitiveness Non-price competitiveness Ability to attract FDI}How WTO conflicts with trading blocs (5) {Ans: Distort world trade Averse effects on non-member states Inefficient allocation of resources Increased protectionism WTO loses power as trading blocs become more powerful}Education/skills {Ans: Important for developing human capital Ensures that the economy can be productive and produce high quality goods and services}Terms of trade {Ans: Indicates the quantity of exports that must