Read the source material carefully before answering Question 1. Source material: Changes in Jordan's economy and population Jordan fact file 2020 Population 11m Economic growth rate -1.5% Labour force employed in the primary sector 2% Labour force employed in the tertiary sector 79% Unemployment rate 23% Inflation rate 2% Trade in services balance -$1bn Import tariff revenue $0.7bn Primary income balance $0.8bn In 2020, Jordan had a deficit on the current account of its balance of payments. This deficit contributed to a decline in Jordan's total demand in that year. This lower total demand was the most important reason why the number of workers was greater than the number of jobs available. Employment fell in most of Jordan's industries. One of Jordan's main industries is tourism. Recent years have seen mergers between some of Jordan's tourism firms. These mergers reduced the prices of some holidays and raised their quality. Jordan's population continues to grow. This is mainly because of net immigration, but also because the country's birth rate exceeds its death rate. Table 1.1 shows the birth rate and average age in six countries in 2020. Table 1.1 Birth rate and average age in six selected countries in 2020 Country Birth rate Average age Germany 9 48 Jordan 23 24 Maldives 16 30 Monaco 6 55 Niger 47 15 Venezuela 18 30 Changes in the size of a country's population affect the market for a range of products including clothing. An increase in population size also puts pressure on the country's sources of energy. The Jordanian government has several large renewable energy projects, and plans to spend even more on such projects. Greater reliance on renewable energy, including wind and solar power, can reduce environmental damage and can be relatively cheap in the long run. However, most renewable energy generators, including hydroelectric power stations, are expensive to build. Also, wind turbines and solar panels rely on favourable weather conditions. Some of the spending by the Jordanian government is financed by borrowing. At the start of 2021, the Jordanian central bank was expected to raise the rate of interest. This was because total demand was predicted to increase and there would be a return to positive economic growth. A higher interest rate might affect Jordan's foreign exchange rate and investment. Answer all parts of Question 1. Refer to the source material in your answers.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2024). The mark or mark type is shown in brackets.

1. [1] 19%.
2. [1] Trade in services;
3. [1] primary income.
4. [1] Cyclical unemployment;
5. [1] lower total demand / fall in employment in most industries / number of workers greater than the number of jobs available.
6. [1] Lower prices; [1] may raise output/GDP/employment/living standards / may be the result of taking advantage of economies of scale.
7. [1] Higher quality; [1] may raise exports / reduce current account deficit / increase international competitiveness / increase tourism revenue / more foreign currency / may be the result of sharing ideas.
8. [2] Countries with a low birth rate are likely to have a high average age / an inverse relationship / negative relationship / move in opposite directions.
9. [2] Four countries with the lowest birth rates had the highest average age / Monaco had the lowest birth rate and the highest average age / Niger with the highest birth rate has the lowest average age / e.g. Germany has a lower birth rate and a higher average age than Jordan.
10. [2] A low birth rate would mean that children would form a small proportion of the population / a high birth rate may mean children would form a high proportion of the population / it would increase the proportion of people aged over 65.
11. [1] A high birth rate may indicate low living standards / lower income which may be associated with low life expectancy.
12. [1] A high average age may mean that there are fewer people of child-bearing age.
13. [1] Venezuela or Maldives had a lower birth rate than Venezuela but the same average age.
14. [1] The average age of a country's population is also influenced by the death rate and net migration.
15. [1] Axes correctly labelled – price and quantity or p and q.
16. [1] Original demand and supply curves correctly labelled.
17. [1] New demand curve shifted to the right.
18. [1] Equilibriums – shown by lines P₁ and Q₁ and P2 and Q2 or equilibrium points marked as E₁ and E2.
19. [1] An increase in population size will increase the number of consumers / increase demand for clothes / price increases.
20. [1] Need for more energy due to an increase in population.
21. [1] Non-renewable sources of energy will run out / reduced dependency on fossil fuels / may reduce import bills.
22. [1] Would reduce environmental damage / reduce external costs / lower pollution / reduce extent of climate change / global warming / promote sustainable development / improve health.
23. [1] Cheaper in the longer run / solar and wind power are free goods / lower costs of production / reduce household bills.
24. [1] Expensive to build / opportunity cost / example.
25. [1] Relies on weather / supplies may be disrupted / insufficient / unreliable.
26. [1] Cost of renewable energy projects may increase with high interest rates / may be funded by borrowing / may increase taxes.
27. [1] May cause visual pollution / e.g. wind turbines.
28. [1] Total demand predicted to increase / may have reduced total demand.
29. [1] Encouraged saving.
30. [1] Discouraged spending / borrowing.
31. [1] Lowered demand-pull inflation.
32. [1] Reduced imports.
33. [1] May have attracted more funds for the Jordanian government to borrow / use for e.g. renewable energy projects.
34. [1] Cost of government borrowing would have increased / may have difficulty paying off government debt.
35. [1] Investment may have been discouraged / lowered economic growth / reduced growth in employment / caused unemployment.
36. [1] May have increased the exchange rate / foreigners depositing money in the country's banks / attracted hot money flow.
37. [1] Raised export prices / lowered import prices / decreased exports / increased imports.
38. [1] Reduced tourism.
39. [1] Increased the current account deficit.