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Question 1

Micro finance schemes

Answer 1

Distribution of small loans to individual entrepreneurs to stimulate growth
Reduces dependency on primary products
Reduces inequality

Question 2

Privatisation

Answer 2

Government sells a firm to a private company
Increases efficiency
Increases quality
Increases allocative efficiency
Increases government revenue

Question 3

Interventionist strategies for growth and development

Answer 3

Development of human capital
Protectionism
Managed exchange rates
Infrastructure development
Joint ventures with global companies
Buffer stock schemes

Question 4

Development of human capital

Answer 4

Improved productivity
Helps countries move up supply chain

Question 5

Advantages of protectionism

Answer 5

Reduces trade deficit
Protects infant industries

Question 6

Disadvantages of protectionism

Answer 6

Distorts the market= loss of allocative efficiency
Higher prices
Less choice
No competition= no incentive to increase efficiency
Tariffs are regressive
Risk of retaliation

Question 7

Infrastructure development

Answer 7

Lower supply costs
Increases mobility of labour
Attracts FDI
Increases employment

Question 8

Joint ventures with global companies

Answer 8

Partnership between 2 global firms
Increases technological knowledge
Foreign markets

Question 9

Advantages of buffer stock scheme

Answer 9

Reduces prices volatility
Incomes of farmers remain stable

Question 10

Disadvantages of buffer stock scheme

Answer 10

Historically unsuccessful
Government may not have financial resources to buy up stock
Storage is difficult and expensive