Tajikistan is one of Asia's low-income countries. Its currency, the somoni, has the key characteristics of money. More than one million Tajik people work abroad, mostly in Russia. In 2020, the Tajik government was concerned that the country's economy might experience a recession which could cause a fall in tax revenue. Despite this possibility, some Tajik firms bought new capital equipment.

Mark scheme

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

1. [1] lower spending / lower demand.
2. [1] lower incomes / lower wages / higher unemployment / lower employment.
3. [1] lower profits.
4. [1] lower tax rates.
5. [1] lower imports.
6. [1] fewer tax payers.
7. [1] lower output.
8. [1] lower revenue.
9. [2] Generally acceptable: people willing to accept it as a payment / reward / in settlement of a debt.
10. [2] Portable: easy to carry.
11. [2] Recognisable: easy to see it is the country's currency.
12. [2] Durable: will last some time / can be saved.
13. [2] Limited in supply: so maintains value.
14. [2] Divisible: there should be units of different value.
15. [2] Homogeneous / uniform: people not preferring e.g. one note of a certain value over another note of the same value.
16. [1] The workers may send money home to (support) their families staying at home.
17. [1] reduce poverty / raise living standards.
18. [1] Will improve the current account position of the balance of payments / bring in foreign currency.
19. [1] secondary income.
20. [1] The workers may receive training.
21. [1] gain skills.
22. [1] ideas / knowledge / awareness of new technology.
23. [1] experience.
24. [1] higher productivity / efficiency which they can bring back to the country.
25. [1] increase quality of output.
26. [1] Start their own firms in the country when they return.
27. [1] increase output / economic growth / increase GDP.
28. [1] May reduce unemployment if lack of jobs at home.
29. [1] and so may reduce government spending on unemployment benefits / may reduce government spending on dependents.
30. [1] Why they might: may embody new technology.
31. [1] Why they might: more innovation / new products.
32. [1] Why they might: may increase efficiency / lower costs of production.
33. [1] Why they might: may lower prices.
34. [1] Why they might: may reduce mistakes.
35. [1] Why they might: increase quality of output.
36. [1] Why they might: may increase output and so availability.
37. [1] Why they might not: may raise prices in the short run to cover the cost of the purchase.
38. [1] Why they might not: may reduce quality / output in the short run as workers get used to the new capital equipment.
39. [1] Why they might not: firms may switch from producing consumer to capital goods.
40. [1] Why they might not: products may become more standardised.