Explain the likely causes of a deficit on the current account of the balance of payments for an economy that relies heavily on agricultural products.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [8] meaning of the current account of the BoP (1 mark)
2. meaning of a deficit (imports > exports) (1 mark)
3. explains one reason that might cause a deficit in the current account of the balance of payments (up to 2 marks)
4. explains (at least) one further reason that might cause a deficit in the current account of the balance of payments (up to 2 marks)
5. elaboration that relates the deficit to dependence on agricultural products (up to 2 marks)
6. [12] explains one policy to reduce the deficit with due reference to the strengths and weaknesses of this policy (up to 4 marks)
7. explains (at least) one further policy to reduce this deficit with due reference to the strengths and weaknesses of the(se) policy(ies) (up to 4 marks)
8. Evaluative judgement that compares the effectiveness of the policies (up to 3 marks); conclusion regarding which is 'most effective' (1 mark)