Japan has a low immigration rate and a declining population. In recent years, it has experienced deflation and a rise in child poverty. By 2017, one in six Japanese children lived in a household with less than half of the average household income. Japan operates a national minimum wage which increased every year between 2010 and 2017. This may have affected the level of poverty in the country.

Mark scheme

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

1. [1] One mark each for two from: larger labour force, reduced dependency rate, higher demand, higher tax revenue, more skilled workers, greater utilisation of resources.
2. [1] Output may fall (1) if due to lower demand firms will cut back production (1).
3. [1] Unemployment may rise (1) fewer workers will be needed to produce fewer goods and services (1).
4. [1] Economic growth may decline / a recession may occur (1) due to lower total (aggregate) demand (1).
5. [1] Output may rise (1) if due to lower costs of production / advances in technology (1).
6. [1] Exports may increase (1) if domestic products have become more price-competitive (1).
7. [1] Likely to receive less education (1) likely to have lower quality healthcare (1) nutrition is likely to be poor (1) likely to gain fewer qualifications/skills (1) be less productive (1) have fewer employment opportunities (1) may be in low paid jobs (1) may be unemployed (1).
8. In assessing each answer, use the table below.
9. Level
10. 3
11. Description
12. A reasoned discussion which accurately examines both sides of the economic argument, making use of economic information and clear and logical analysis to evaluate economic issues and situations. One side of the argument may have more depth than the other but, overall, both sides of the argument are considered and developed. There is thoughtful evaluation of economic concepts, terminology, information and/or data appropriate to the question. The discussion may also point out the possible uncertainties of alternative decisions and outcomes.
13. Marks
14. 6-8
15. 2
16. A reasoned discussion which makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one-sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question.
17. 3-5
18. 1
19. There is a simple attempt at using economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding.
20. 1-2
21. 0
22. A mark of zero should be awarded for no creditable content.
23. Why it might:
24. is set above the equilibrium level, will raise the pay of the low-paid
25. may reduce relative poverty by reducing the gap between high and low-income earners
26. may reduce absolute poverty by enabling low paid workers greater access to basic necessities
27. may raise employment, if it motivates workers and raises productivity
28. may raise employment if it increases total (aggregate) demand.
29. Why it might not:
30. may not have any impact if set below the equilibrium level
31. unemployment may rise as it may increase firms' costs of production
32. will not help the poor who are unable to work
33. may not reduce relative poverty if it results in other workers pressing for, and getting, wage rises to maintain their wage differentials
34. some receiving it may not be in poor households.
35. Reward, but do not expect, a national minimum wage diagram which shows the effect on pay and employment.