(i) Suggest two reasons that could explain why Ethiopia’s current account balance is different from its balance of trade in goods and services in 2015, as shown in Table 1.1.
- Suggest two reasons that could explain why Ethiopia’s current account balance is different from its balance of trade in goods and services in 2015, as shown in Table 1.1. [2]
(ii) Explain one possible effect on Ethiopia’s balance of trade in goods and services of operating the new railway line to Djibouti.
- Explain one possible effect on Ethiopia’s balance of trade in goods and services of operating the new railway line to Djibouti. [2]
Identify two ways in which China’s economy could gain from the building of infrastructure in Ethiopia.
Use a production possibility curve to explain the opportunity cost Ethiopia would face if it did not have access to help from China in building new infrastructure.
Consider whether a road network, such as the one upgraded in Ethiopia with government funds, ought to be classified as a public good.
Use aggregate demand and aggregate supply analysis to discuss how output, employment and prices might be influenced by the development of infrastructure in Ethiopia.