The Mints Mexico, Indonesia, Nigeria and Turkey, known as the Mints, are four emerging economies that are predicted to grow rapidly. The four countries have relatively large populations, from 75 million in Turkey to 242 million in Indonesia in 2014. They also have high birth rates, from 17 in Turkey to 41.5 in Nigeria per 1000 people. Both income per head and the countries' Human Development Index ranking are improving. The changes, however, do not mean that everyone in the four countries is satisfied. As incomes increase, so do people's wants, and what people would like to consume exceeds the maximum output that countries are capable of producing. Output and consumption are increasing in each of the four countries. Nigeria, for example, is predicted to be one of the world's 20 largest economies by 2020. Productivity is rising in most sectors of the Nigerian economy although it remains low in agriculture. Despite some security concerns, more multinational companies are setting up in the country, attracted by its expanding markets. Nigeria and Turkey both had annual inflation rates above 8% in 2014. Indonesia's was 5.7% and Mexico's 5.2%. The Mexican Government had used monetary policy measures in that year to keep the inflation rate down. In August 2014 it opened up its energy market, allowing private sector firms to compete against the country's state-owned petroleum firm. It increased spending on state-provided health care, which operates alongside private medical care. The four countries saw fluctuations in their exchange rates in 2014. Indonesia's currency, the rupiah, changed from 10685 per US$ the year before to 11450 per US$ in 2014. Turkey's currency, the Turkish Lira, followed a similar trend. Changes in the exchange rate can affect firms' costs of production, as can industrial action. In June 2014 Turkish trade unions organised a number of strikes seeking to gain better wages and working conditions for their members. However, the power of Turkish trade unions is limited by restrictive trade union legislation and a small membership, with only 9% of workers belonging to trade unions. This means that collective bargaining is not a key feature of Turkish labour markets and Turkish trade unions do not have much influence on economic policy.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) What people would like to consume/wants (1) exceeding the maximum output the countries are capable of producing (1). Note. no marks for just a definition of the economic problem.
2. [2] (b) 1275000 or 1.275m (2). Correct working: 17 × 75m/1000 or version of 1275 (1).
3. [4] (c) 1 mark for each of 2 reasons identified and 1 mark for each of 2 explanations. Rising productivity (1) workers being able to produce more per hour/will become more attractive to employers (1). More MNCs setting up in the country (1) may increase demand for labour/may pay higher wages than domestic producers (1). Expanding markets (1) higher demand for products leads to higher demand for labour (1). Inflation (1) workers may press for wage rises to keep up with inflation (1).
4. [3] (d) A mixed economy (1). Has private sector and public sector firms (1). Health care is provided by both the public and private sector (1). The government intervenes in the economy in the form of monetary policy (1). Note. 1 mark for identifying mixed economy. Up to 2 marks for relevant evidence on factors that influence the type of economic system.
5. [4] (e) The value of the rupiah fell (1) more of the currency had to be exchanged to obtain a US dollar (1) a lower exchange rate would increase the price of imports (1) this is likely to have reduced demand for imports (1) import expenditure is likely to have fallen (1) if PED >1. NOTE. OFR: if a candidate identifies a rise in the value of the rupiah, award a maximum of 2 marks for a good analysis based on this interpretation but no marks for just stating that the rupiah rose in value.
6. [5] (f) Up to 3 marks for why it is: It is a wider measure than GDP per head (1). It covers three important influences on living standards (1) income, education and health care (1). Produced by a reputable body (1) the United Nations (1). Up to 3 marks for why it is not: It does not take into account all the factors that influence living standards (1) examples, e.g. distribution of income, environmental factors (up to 2). The weightings may not reflect the relative contribution of the indicators to living standards (1), e.g. some might argue life expectancy should be given a greater weighting than GDP per head (1). Do not expect other measures but reward appropriate ones such as the Multidimensional Poverty Index which includes more indicators (1), e.g. access to sanitation (1).
7. [4] (g) Collective bargaining/protecting rights/negotiating (1) to improve wages and/or working conditions (1). Taking industrial action, i.e. strikes (1) in pursuit of higher wages and/or better working conditions (1). To influence government policy (1) on, e.g. a minimum wage (1).
8. [6] (h) Up to 4 marks for why they might: Population growth resulting from net immigration/natural increase (rise in birth rate/fall in death rate) (1) may increase the labour force (1) increasing productive potential/ability to produce products will rise (1). The quality of the labour force may increase (1) if the high population growth is the result of the immigration of skilled workers/more young people who have received better education than their elders (1) this will increase productivity (1) increasing productive potential/ability to produce products will rise (1). A growing population increases total demand (1) this will encourage firms to increase their output (1) may attract MNCs to set up in the country (1). A higher population may make better use of resources (1) allow firms to take advantage of economies of scale (1). Up to 4 marks for why they might not: A higher population may increase economic growth in terms of output but not GDP per head (1) if population grows at a greater rate than GDP (1). A higher population may put pressure on resources (1) may be less capital/land per worker (1) reducing productivity (1) resources may be diverted from increasing productive capacity to coping with more dependents (1). A rise in birth rate/fall in death rate/immigration of the elderly or children will increase dependents (1) the very young and the old are not economically active (1). Reward but do not expect reference to the optimum population.