Economics 0455 · IGCSE · Differences in economic development between countries
Differences in economic development between countries — practice question
In 1982, Nauru recorded the world’s highest GDP per head. Its primary sector was large, and it exported phosphate, a natural fertiliser. Even so, this natural resource was exhausted after a short time. Nauru is now experiencing market failure because of pollution and unhealthy food imports. Although its imports of goods are greater than its exports of goods, it still shows a surplus on the current account of its balance of payments.
(a)[2]
Define what GDP per head means.
(b)[4]
Explain how a country can have more imports of goods than exports of goods and yet still show a surplus on the current account of its balance of payments.
(c)[6]
Analyse the causes of market failure in an economy.
(d)[8]
Discuss whether a large primary sector is, or is not, a disadvantage to an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Total GDP divided by the population size” …