Recently, wage rate growth in Kazakhstan has risen, whereas its economic growth rate has weakened. One reason for this is a drop in exports. In order to lift the economic growth rate, the government has raised spending on investment. In August 2015, it introduced a floating foreign exchange rate system in an effort to strengthen the country’s macroeconomic performance.
(a)[2]
Define wages.
(b)[4]
Explain two reasons, apart from protectionist methods, why a country’s exports might decline.
(c)[6]
Analyse how a rise in investment could lift a country’s economic growth rate.
(d)[8]
Discuss whether a country ought to move from a fixed foreign exchange rate system to a floating foreign exchange rate system.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Remuneration paid to labour/workers” …