A-LevelEconomicsThe macroeconomy9708/42 · Oct/Nov 2018 · Q725 Marks

Explain how developing countries differ from developed countries.

(a)Explain how developing countries differ from developed countries.[12]
(b)Assess the extent to which a multinational company's investment in a developing country leads to economic growth.[13]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

[12] (a) A consideration of a number of different factors: GDP, GDP per capita, the likely age structure, the structure of the economy, access to capital, the type and quantity of investment, the ability of the labour force, the state of the balance of payments.
[13] (b) The role of a multinational corporation (MNC) in bring investment to a country. The impact of investment as a component of AD. Multiplier effects of investment. Consideration of the size of the multiplier. Recognition that unemployment exists but labour skills may be inadequate. Impact on the other elements of AD, government, imports, exports and consumption.

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Structured question, 25 marks.
Source: A-Level Economics, Oct/Nov 2018 Paper 4 Variant 2, question 7.

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