'Developing countries have low levels of productivity and a high dependency ratio.' Explain the meaning of these two characteristics and consider whether they are linked.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. [12] Candidates should provide clear explanation of the terms productivity and dependency ratio. It is essential that the characteristics of both terms are established within the context of undeveloped countries. Responses might suggest that the two terms are linked, for example high dependency ratio might be associated with low productivity or an increase in productivity might lead to a reduction in the death rate and a reduction in the birth rate, due to its effect on the overall level of increase of GDP. Alternatively, it could be argued that the two are not necessarily related. A range of alternative responses would be acceptable provided they are supported by an acceptable economic rationale.
2. [9-12] an answer that clearly explains both characteristics in the context of an underdeveloped country and then discusses how each characteristic might be linked. Responses should examine links which work both ways, for example, why an increase in productivity might affect the dependency and vice versa. Different approaches are acceptable but a conclusion should be provided.
3. [7-8] For a clear explanation of both characteristics and their relation to an underdeveloped economy. Some attempt to establish links between these characteristics but the argument will not be fully developed.
4. [5-6] For a limited attempt to describe the two characteristics but only provides a brief explanation of their relevance to an underdeveloped economy. A brief outline of potential links might be described but not discussed.
5. [1-4] For an answer that has some basic correct facts but includes irrelevancies and errors of theory.
6. [13] Foreign direct investment should be explained referring specifically to the role of private multinational corporations (MNCs) including references to improving labour skills, building factories, promoting research and development. Economic growth should be clearly defined as the increase in real GDP in a specific time period. Alternative growth strategies such as export led growth, direct government investment, structural change might be considered. The importance of foreign direct investment should then be compared with the alternative strategies identified.
7. [9-13] For an answer that clearly explains both characteristics in the context of an underdeveloped country and then discusses how each characteristic might be linked. Responses should examine links which work both ways, for example, why an increase in productivity might affect the dependency and vice versa. Different approaches are acceptable but a conclusion should be provided.
8. [7-8] For a clear explanation of both characteristics and their relation to an underdeveloped economy. Some attempt to establish links between these characteristics but the argument will not be fully developed.
9. [5-6] For a limited attempt to describe the two characteristics but only provides a brief explanation of their relevance to an underdeveloped economy. A brief outline of potential links might be described but not discussed.
10. [1-4] For an answer that has some basic correct facts but includes irrelevancies and errors of theory.