O-LevelEconomicsEconomic development2281/12 · May/June 2022 · Q121 Mark

Germany is considered a capital-intensive economy while Indonesia is considered a labour-intensive economy. What does this mean about the economies of Germany and Indonesia?

ACapital is relatively cheaper than labour in Germany while labour is relatively cheaper than capital in Indonesia.

BGermany has many primary sector workers while Indonesia has many tertiary sector workers.

CIndonesia has a higher growth in its population size than Germany.

DRelatively more low-cost labour is available in Germany while capital is more efficient than labour in Indonesia.

✓ Correct answer

A: Capital is relatively cheaper than labour in Germany while labour is relatively cheaper than capital in Indonesia.

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Topic: Economic development, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2022 Paper 1 Variant 2, question 12.

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