(a)
- Using your working, determine which spending category recorded the largest rise in price from January to September 2013. [2]
- Why are the spending categories given different weights in Table 1? [2]
(b)
- Explain how the fact that Malawi has the highest inflation rate in the southern African region might be expected to affect Malawi’s terms of trade. [2]
- Using a diagram, explain how an increase in exports could offer a solution to Malawi’s weak currency. [3]
(c)
- Draw a diagram to show the choice Malawi faces when allocating its scarce resources between tobacco production and tourism. [2]
- Explain one problem that Malawi might face when reallocating resources from the production of tobacco to tourism. [3]
(d)[6]
Discuss the factors that should be taken into account by the Malawian Government when deciding whether it should develop its tourist industry and let its tobacco industry decline.