Country X has a mixed economy with both private and public sector organisations. These organisations are involved in different sectors of economic activity. In the last 20 years the primary sector has become less important to country X's economy. A summary of the changes is shown in Table 3.1. The government is planning to encourage multinational companies to set up factories in country X. Table 3.1 Economic sectors in country X as a percentage of GDP | Year | Primary | Secondary | Tertiary | |:-----|:--------|:----------|:---------| | 2000 | 60% | 15% | 25% | | 2020 | 20% | 30% | 50% |

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2023). The mark or mark type is shown in brackets.

1. [2] Award 2 marks for a full definition. Award 1 mark for a partial definition.
2. Government/state owned businesses [2]
3. Partial definition e.g. run/operated/controlled by government [1]
4. [2] Award 2 marks for a full definition. Award 1 mark for a partial definition.
5. The total value of output of goods and services in a country in one year [2]
6. OR
7. The monetary value of all goods and services produced by an economy during a specific period (of time) [2]
8. Partial definition e.g. value of goods produced by a country [1]
9. [4] Award 1 mark per type (max 4).
10. Answers might include:
11. Sole trader
12. Partnership
13. Private limited company
14. Public limited company
15. Joint venture
16. Franchise
17. Social enterprise
18. Other appropriate responses should be credited.
19. [6] Award 1 mark for each relevant reason (max 2).
20. Award 1 mark for each relevant reference to this business (max 2).
21. Award 1 mark for each relevant explanation (max 2).
22. Points might include:
23. Fewer/depletion of natural resources leading to a decrease in primary sector of 40% so workers must find jobs in other sectors/may need to import resources
24. Increased use of machinery/technology in primary sector reduces the need for employees which is why primary sector is only 20% in 2020
25. Industrialisation/setting up of factories which creates jobs in the secondary sector which has increased by 15%
26. Better/increased education so workers seek higher paid jobs which is why tertiary sector has increased to 50%
27. Fewer grants/less government support for primary sector OR more grants for secondary/tertiary sector businesses
28. Import (more)/cheaper raw materials
29. Other appropriate responses should be credited.
30. [6] Award up to 2 marks for identification of relevant points.
31. Award up to 2 marks for relevant development of points.
32. Award up to 2 marks for a justified decision as to whether the benefits to a country where a multinational company is located are always greater than the drawbacks.
33. Points might include:
34. Benefits:
35. Increase number/availability of jobs reduces unemployment
36. Increase taxes which can be used to improve public services
37. Increase reputation of country could encourage other businesses to set up/invest in the country
38. Increasing orders for local suppliers increasing income for local businesses/GDP
39. Wider choice/quality of goods
40. Improve infrastructure/new investment/new technology
41. Knowledge-sharing/new ideas
42. Drawbacks:
43. Increased competition reducing sales for local businesses which can force them out of business/reducing revenue
44. Use up scarce resources so less resources for other uses
45. Repatriation of profits/send profits back to home country so country does not receive expected amount of tax revenue
46. Often only unskilled jobs created / may offer low wages/ poor working conditions / exploitation of labour
47. Often try to avoid/reduce amount of tax paid (in host country)
48. Power to influence government decisions/local economy
49. Other appropriate responses should be credited.
50. Justification might include:
51. Multinational companies create employment opportunities which reduces unemployment. However, they can try to avoid taxes so less funds to provide public services. Countries do benefit from multinationals operating there even if the full amount of tax is not paid, the amount paid can be used to develop the country which could improve living standards.