Country X is experiencing a period of sustained economic growth. The government is considering policies to manage this growth.

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

1. **(a) Define the term 'economic growth'. (2 marks)**
2. Level 1 (1 mark): Partial definition, e.g., 'increase in output'.
3. Level 2 (2 marks): Clear and accurate definition, e.g., 'A sustained increase in the real national output (or GDP) of an economy over a period of time' (1 mark for sustained increase, 1 mark for real output/GDP).
4. **(b) State two benefits of economic growth for a country. (2 marks)**
5. B1 for each correct benefit stated (e.g., 'higher living standards', 'increased employment', 'increased tax revenue', 'reduced poverty'). Max 2 marks.
6. **(c) Explain two factors that could contribute to a country's economic growth. (6 marks)**
7. Up to 2 factors can be credited.
8. For each factor (3 marks):
9. P1 for identification of a relevant factor (e.g., 'increase in investment', 'improved education/skills', 'technological advancements', 'discovery of new natural resources', 'improved infrastructure').
10. C1 for development/explanation of how the factor contributes to growth (e.g., 'investment in new capital goods increases productive capacity').
11. C1 for further development/explanation or linking to higher output/productivity (e.g., 'leading to a greater potential output of goods and services').
12. **(d) Discuss the advantages and disadvantages for a country of specialising in the production of particular goods and services. (10 marks)**
13. Level 1 (1–2 marks): Limited understanding of specialisation or basic identification of one advantage/disadvantage.
14. Level 2 (3–4 marks): Basic explanation of advantages or disadvantages, with limited analysis.
15. Level 3 (5–7 marks): Developed analysis of both advantages and disadvantages. Some attempt at evaluation or balance.
16. Level 4 (8–10 marks): Comprehensive and balanced discussion, with clear analysis of both advantages and disadvantages, and well-supported evaluation. May consider different contexts or magnitudes.
17. Indicative content may include:
18. Advantages: Increased efficiency, lower average costs, higher output, greater variety of goods through trade, economic growth, comparative advantage, economies of scale.
19. Disadvantages: Over-reliance on a single industry, vulnerability to changes in global demand/prices, risk of unemployment if demand falls, lack of diversification, potential for structural unemployment, de-industrialisation.