7

Question 1

Access to credit and banking

Answer 1

Difficult to save in a country with a poor banking system

Question 2

Infrastructure

Answer 2

Port infrastructure discourages FDI due to high production costs

Question 3

Education/ skills

Answer 3

Important for developing human capital

Ensures that the economy can be productive and produce high quality goods and services

Question 4

Property rights

Answer 4

No property rights mean that entrepreneurs cannot protect their ideas
No incentive to innovate

Question 5

Non- economic factors

Answer 5

War
Corruption
External shocks

Question 6

Market- oriented strategies for growth and development

Answer 6

Trade liberalisation
Promotion of FDI
Removal of subsidies
Floating exchange rate system
Micro finance schemes
Privatisation

Question 7

Trade liberalisation

Answer 7

Free trade increases world GDP

Question 8

Promotion of FDI

Answer 8

Creates employment
Encourages innovation
Promotes long- term, sustainable growth
Provides developing countries with funds to invest and develop

Question 9

Removal of subsidies

Answer 9

Subsidies distort the free market
Leads to inefficient allocation of resources
However certain goods will be under provided

Question 10

Floating exchange rate systems

Answer 10

Determined by the market mechanism