Saudi Arabia's economic system may change in the future. The country's central bank is dealing with more private sector banks. In 2020, the population's average age of 31.8 was just above the global average of 31.2. In that year, plans were announced to build a city where no cars would be needed or allowed. Such a development might encourage more young people to move to Saudi Arabia.

Mark scheme

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

1. [2] 3(a) Market (1) mixed (1). Also accept but do not expect: planned / command. No marks for free market system or controlled market system.
2. [4] 3(b) Logical explanation which might include: Operates monetary policy / controls inflation (1) e.g. sets the rate of interest / manages the money supply (1). Carries out quantitative easing (1) to stimulate economic activity during a financial crisis (1). Issues notes and coins (1) often the only bank allowed to do so (1). Acts as bank to the government (1) receives payments to the government and makes payments on behalf of the government / manages the national debt (1). Acts as lender of last resort (1) lends to commercial banks in difficulties (1). Holds reserves of foreign currency (1) to influence the exchange rate (1). May regulate banking system (1) ensuring banks do not take too many risks (1). One mark each for each of two functions identified and one mark each for each of two explanations. If more than two functions are given, consider the first three.
3. [6] 3(c) Coherent analysis which might include: A young population may: be more up to date with modern technology (1) may have received more education / training / are more skillful (1) be more productive (1) increase output (1). add to the labour force (1) increasing productive capacity (1) greater tax revenue (1) government can spend more e.g. to improve infrastructure (1). lead to lower government expenditure on pensions (1) and health services for the elderly (1) so can spend more on factors leading to economic growth e.g. education / infrastructure (1). be more geographically mobile (1) e.g. have fewer family ties (1). be more occupationally mobile (1) less attached to particular jobs / broader range of skills (1). spend more of their income than older people (1) be more innovative (1) able to start their own businesses (1) increasing output / wealth (1). be physically fit / stronger (1) less likely to be off sick (1). be a more skilled labour force (1) will attract investment from abroad / FDI (1).
4. [8] 3(d) Why it might: may reduce air and noise pollution; avoid traffic congestion; reduce staff absence through illness; avoid accidents; greater demand for public transport; greater employment in public transport; pedestrianised shopping centres may attract more customers; free up police and court time; raise quality of life; frees up funds to spend on better education / health / housing. Why it might not: journey times by e.g. bikes may take longer; people can enjoy driving; may reduce visitors to the area, lowering demand for shops; may lower house prices; car sales firms will move out of the area; reduces labour mobility. Note: level 1 would be knowledge and understanding of terms such as ban, city, household or firms or just identification of points.