Section A
Before you answer Question 1, read the source material closely.
Source material: The Egyptian economy
Egypt fact file (2022): GDP $469.1bn; Population 110.0m; Poverty rate 27.9%; Unemployment rate 7.2%.
Tourists have long been drawn to Egypt because of the pyramids and other ancient sights. Even so, the tertiary sector is not the only driver of economic growth; the primary and secondary sectors also add to growth. Egypt’s exports include personal travel, oil, citrus fruits, gold and textiles.
Recently, Egypt has experienced a construction boom. A new city is under construction and needs finance, raw materials and labour. Businesses are taking a large risk on this scheme because houses are being built before demand has been confirmed. For instance, if incomes fall, the housing market could fail to make a profit.
Tourism provides Egypt with a strong source of economic growth. The country offers attractions that date back thousands of years as well as natural attractions such as attractive beaches and a warm climate. It also has good infrastructure and is regarded as a safe and secure country, which further draws tourists.
Free market reforms have increased investment in Egypt. Fig. 1.1 presents investment (as a percentage of GDP) and economic growth rates in Egypt, 2015-2021.
Fig. 1.1 description: The vertical axis is labelled "Percentage (%)" with markings from 0 to 20. The horizontal axis is labelled "Year" and shows 2015, 2016, 2017, 2018, 2019, 2020 and 2021. The dotted line is labelled "Investment (as a % of GDP)" and the solid line is labelled "Economic growth rates (%)".
Deregulation in education has resulted in a higher number of schools and universities in Egypt. Greater access to education and training should lead to future rises in living standards. However, the establishment of more private schools and universities may widen inequality because private education may still be too costly for some income groups.
In 2022, the Egyptian currency fell to half its previous value against the US dollar. This decline in the currency’s value affected inflation and Egyptians’ purchasing power. On the other hand, some industries, including tourism, gained from this because holidays in Egypt became more affordable for non-Egyptians.
(a)[1]
Calculate how many people in Egypt are living in poverty.
(b)[2]
Identify two of Egypt’s primary sector exports.
(c)[2]
Explain how the construction of a new city can reduce unemployment.
(d)[4]
Explain why tourism is an important source of economic growth for Egypt.
(e)[4]
Draw a demand and supply diagram to illustrate the probable effect of falling incomes on the housing market in the new city.
(f)[5]
Analyse the connection between investment (as a % of GDP) and economic growth rates in Egypt.
(g)[6]
Discuss whether deregulation in education in Egypt will raise living standards.
(h)[6]
Discuss whether a fall in the value of the Egyptian currency would damage the Egyptian economy.
Worked solution & mark scheme
This 30-mark question has a full step-by-step worked solution and mark scheme. One marking point: “30 690 000 people / roughly 30.69 million” …