Read the source material carefully before answering Question 1. Source material: How will oil change Guyana? Guyana fact file 2020 Population 790000 Estimated optimum population 1100000 Proportion of population living in poverty 35% Economic growth rate 26% Unemployment rate 11% Current account of the balance of payments -$237m Guyana was the fastest growing economy in the world in 2020. Sugar, gold and timber have accounted for a relatively high proportion of the country's output and exports for some time. In 2020, the sugar industry was hit by bad weather and falling global demand. In contrast, the output of gold and timber increased. The main reason why Guyana's real GDP increased so rapidly was the increase in oil production. Oil was discovered offshore by a foreign multinational company (MNC) in 2015 and the MNC started production in 2019. It is predicted that Guyana will become the world's largest oil producer per head by 2025. The Guyanese government is planning to use some of the tax revenue it will raise from oil to spend on education and improvements to the country's infrastructure. Planned projects include new railway lines and stations. A more extensive and cheaper rail service may enable more people to work further from home and may influence the market for substitutes, such as car transport. The Guyanese government is also planning to spend some of the tax revenue on improving the country's access to the internet. Table 1.1 shows GDP per head and internet access in seven countries in 2020. Table 1.1 GDP per head and internet access in selected countries in 2020 Country GDP per head ($) Population with internet access (%) Brazil 8717 72 Eritrea 643 2 France 40494 83 Guyana 6160 39 Iceland 66 945 99 Morocco 3204 64 Zambia 1305 29 Guyana has experienced a slow growth in its population size in recent years. In 2020, its birth rate was 16.5, its death rate was 6.8 and its net migration rate was –7.7. With increases in oil production, emigration may decline and the country may start to experience net immigration. A higher population may affect Guyana in a number of ways including changing the size of its labour force and affecting the environment.

Mark scheme

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

1. [1] 276 500.
2. [1] Bad weather;
3. [1] falling (global) demand.
4. [1] Real;
5. [1] GDP / national / country's output / income / expenditure.
6. [1] Increased government spending on education / improved education; [1] improved skills / productivity / occupational mobility.
7. [1] Improved / cheaper rail travel / increased spending on infrastructure / improved infrastructure; [1] easier to work further away / increased ability to work in other areas / increased geographical mobility.
8. [1] Increased government spending on the internet; [1] people learn new skills / gain information about job opportunities / increase occupational mobility.
9. [1] May be net immigration; [1] migrants may be skilled / may be more willing to move to different areas of the country.
10. [1] Axes correctly labelled – price and quantity or p and q.
11. [1] Original demand and supply curves correctly labelled.
12. [1] Demand curve shifted to the left.
13. [1] Equilibriums – shown by lines P₁ and Q₁ and P2 and Q2 or equilibrium points marked as E₁ and E2.
14. [1] Expected relationship: Direct / positive (relationship) the higher the GDP per head, the higher the internet access.
15. [2] Supporting evidence (Up to two marks): E.g. Iceland with the highest GDP per head had the highest % of the population with internet access; Eritrea with the lowest GDP per head had the least internet access; France with the second highest GDP per head has the second highest % of population with internet access. (One mark maximum for an indirect comparison e.g. Iceland had a GDP per head of $66 945 and 99% population with internet access whereas in Zambia with a GDP per head of $1,305, only 29% of the population had access to the internet.)
16. [1] Analysis of expected relationship: Higher GDP per head increases household's ability to pay for internet access / higher internet access may increase productivity/efficiency / increase job opportunities / higher GDP per head increases tax revenue, some of which can be spent on the provision of internet access / higher productivity/efficiency could increase wages.
17. [1] Exception: Guyana / Morocco - Guyana had a higher GDP per head but low internet access.
18. [1] Analysis of exception: Internet access is determined by other influences e.g. education levels.
19. [1] Why it might (increase living standards): increase exports; [1] increase economic growth / higher national output / raise incomes / increase GDP per head; [1] increase purchasing power / able to buy more goods and services / able to buy basic necessities; [1] could reduce poverty.
20. [1] Why it might (increase living standards): create jobs / reduce unemployment / increase employment; [1] discourage emigration / encourage immigration.
21. [1] Why it might (increase living standards): raise tax revenue; [1] allowing the government to spend more on e.g. education and healthcare; [1] MNCs may spend on e.g. improving infrastructure / training.
22. [1] Why it might not (increase living standards): may create pollution; [1] create external costs / damage the environment; [1] which will harm people's health / reduce life expectancy.
23. [1] Why it might not (increase living standards): may be poor working conditions in the industry; [1] affecting health of workers.
24. [1] Why it might not (increase living standards): the foreign MNC may send much of the profit back to its country; [1] it may drive domestic oil firms out of business; [1] may deplete the country's oil reserves.
25. [1] Why it might not (increase living standards): the foreign MNC may employ workers from its own country.
26. [1] Why it might not (increase living standards): global demand for oil may fall / may be overdependence on oil / other countries may impose trade restrictions on oil.
27. [1] Why it might (benefit from population increase): population is below the optimum level / move to the optimum level; [1] could make better use of resources.
28. [1] Why it might (benefit from population increase): if rise due to immigration; [1] may bring in new ideas / new production methods / new skills / new technology.
29. [1] Why it might (benefit from population increase): an increase in the size of the labour force; [1] if the number of people of working age increases; [1] rise in tax revenue; [1] allowing the government to spend more on e.g. education and healthcare.
30. [1] Why it might (benefit from population increase): consumer expenditure may increase; [1] total (aggregate) demand may increase.
31. [1] Why it might (benefit from population increase): output could increase / cause economic growth / increase productive potential.
32. [1] Why it might (benefit from population increase): dependency ratio could fall.
33. [1] Why it might not (benefit from population increase): larger population could result in pollution / congestion / overcrowding; [1] damage the environment / increase external costs.
34. [1] Why it might not (benefit from population increase): if rise due to fall in death rate or rise in the birth rate / increase in young / old population; [1] the dependency ratio will increase; [1] some of the extra population may be unemployed.
35. [1] Why it might not (benefit from population increase): pressure may be put on e.g. housing / welfare payments; [1] increasing need for government expenditure.
36. [1] Why it might not (benefit from population increase): there may be inflation.
37. [1] Why it might not (benefit from population increase): population may increase to the extent that there is overpopulation; [1] resources may be depleted (more quickly).