Italy is home to the world's oldest bank and some of the world's oldest car producers. Internationally, both industries are facing a number of challenges. The wages of bank workers and car workers are increasing. Demand for bank loans and for cars is changing, in part, due to changes in population size. It is predicted that the price elasticity of demand (PED) for cars will also change in the future.

Mark scheme

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

1. [1] lending
2. [1] accepting deposits
3. [1] allowing customers to make payments
4. [1] looking after valuables
5. [1] giving financial advice
6. [1] providing insurance
7. [1] exchanging foreign currency
8. [1] Rise in unemployment
9. [1] people move abroad in search of jobs
10. [1] Fall in income
11. [1] seek higher wages abroad
12. [1] Lower living standards e.g. healthcare may be better abroad / less pollution
13. [1] Relaxation on immigration controls
14. [1] making it easier to move abroad
15. [1] Greater social unrest / outbreak of war
16. [1] seek greater security
17. [1] High inflation at home
18. [1] seek lower cost of living
19. [1] Demand for bank workers may increase
20. [1] due to higher demand for banking / more people opening bank accounts/using the services of banks
21. [1] result from a rise in the productivity of workers
22. [1] more banks competing for the services of bank workers / more competition for workers
23. [1] higher wages paid to retain bank workers
24. [1] Supply of bank workers may fall
25. [1] qualifications may have been increased
26. [1] skills may have increased / may need to be more skilled as working with more advanced technology
27. [1] Bank workers may use trade union power
28. [1] collective bargaining and/or industrial action
29. [1] Banks may have earned large profits
30. [1] rewarded workers with bonuses / high pay
31. [1] bonuses / high pay may be used to motivate workers
32. [1] A higher national minimum wage
33. [1] forcing banks to pay some of their staff more
34. [1] Bank workers may work longer hours / may work overtime
35. [1] Bank workers may be more experienced / more productive / more skilled
36. [1] Inflation / higher income tax
37. [1] purchasing power will fall unless wages increased
38. [1] may be closer substitutes
39. [1] Price of public transport and /or quality of public transport may fall making them closer substitutes
40. [1] may take up a larger proportion of income
41. [1] Incomes may fall
42. [1] price may rise
43. [1] Demand becomes more price elastic as price rises
44. [1] the number of firms producing certain types of cars may increase
45. [1] time will give consumers more opportunity to search out lower prices
46. [1] may become more of a necessity
47. [1] People may work further from where they live
48. [1] may become easier to postpone purchase
49. [1] If cars last longer, consumers may be able to delay buying replacements
50. [1] people may have become used to driving – habit forming
51. [1] May be reluctant not to own and drive a car
52. [1] price of complements may rise, so that even if price of cars fall, people may not buy more cars