Extract 3

Question 1

Terms of Trade

Answer 1

Measures the amount of exports that a country needs to sell in order to purchase the amount of desired imports.

Question 2

ToT Appreciation

Answer 2

Increase in the price means that they need to sell less exports in order to achieve the value of imports. Improved.

Question 3

ToT Depreciation

Answer 3

Decreases the price meaning more exports need to be sold to get the value of imports. Worsened.

Question 4

Economic Development Definition

Answer 4

The process of improving peoples economic well being and quality of life.

Question 5

How development can be improved

Answer 5

Material Standard of Living - Fridges, T.V’s sanitary and cooking equipment.
Non-Material Standard of Living - Healthcare, education

Question 6

Indicators of Economic Development

Answer 6

Gini Coefficient - This improves moves closer to the point of income equality, people are more equal.
Expected/mean years in school, primary enrolment
REDUCES POVERTY
Economic Growth creates Economic Development

Question 7

Primary Commodity

Answer 7

Main export of Zambia is Copper 75% of its export
Very volatile prices and inelastic demand and supply
Changes in demand and supply impact price.
High price means ToT improve
Low price ToT deteriorate especially as its a big % of trade

Question 8

Primary Commodity Globally

Answer 8

Increased globalisation will increase demand for copper
Export revenue will increase
Increase AD (X-M) increases, higher GDP
Improve ToT, can buy imports and sell less exports

Question 9

Zambia Development Indicators

Answer 9

Primary Enrolment - 84% to 119% Adults enrolled
Mean Years schooling - Consistently increased
Expected years of schooling - Consistently increased

Question 10

HDI

Answer 10

Measures the countries relatively economic development and economic welfare.

Question 11

Limitations of HDI

Answer 11

• Differences between regions within countries i.e China
• Economic welfare depends on other factors, war, pollution, clean drinking water
• High GNI may be income / social inequalities, like women

Question 12

Terms of Trade and Development
Education
Opposite for reducing ToT

Answer 12

ToT increase gov spend on education from corporation tax
Build more schools/teachers/equipment
Easier access/higher qual enrolment/mean years increase
Relate to Extract 84% 2001, 108% in 2013
Non Material Development

Question 13

Terms of Trade and Development
Infrastructure
Opposite for reducing ToT

Answer 13

ToT increase spend on infrastructure from corporation tax
Road building, port expansion, airpot building
Costs decrease promoting business growth / FDI
Job creation, improve living standards reducing poverty
Relate to Extract
Access to schools and healthcare improves as well

Question 14

Terms of Trade and Development
Hospitals
Opposite for reducing ToT

Answer 14

ToT increase spend on hospitals from corporation tax
Building hospitals in rural areas
Improve health standards, life expectancy
Increase incomes and productivity
Relate to Extract