In Egypt during both 2011 and 2012, GDP per head and investment both decreased. One cause of the fall in investment was that firms found it hard to get loans from the country’s commercial banks. Another was the ending of some government subsidies, including the subsidy paid to producers of petrol.
(a)[2]
Define the term ‘GDP per head’.
(b)[4]
Explain two reasons why firms may struggle to secure loans from commercial banks.
(c)[6]
Using a demand and supply diagram, analyse what happens to the market for petrol if a subsidy on petrol is withdrawn.
(d)[8]
Discuss whether a decline in a country’s GDP will result in net emigration.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Overall output or income” …