O-LevelEconomicsEconomic development2281/11 · May/June 2014 · Q251 Mark

Developing countries often wish to prevent the population in rural areas moving to the towns. Investment grants are given to companies if they set up their businesses in rural areas. What is this policy intended to achieve?

Adecreased transport costs

Bdecreased external cost

Cincreased economies of scale

Dincreased use of labour

✓ Correct answer

D: increased use of labour

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Topic: Economic development, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2014 Paper 1 Variant 1, question 25.

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