Recently in Kazakhstan, wage rate growth has risen, yet the pace of economic growth has fallen. One reason is a decrease in exports. To raise the economic growth rate, the government has boosted 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 the term wages.
(b)[4]
Explain two factors, apart from methods of protection, that may cause a country's exports to fall.
(c)[6]
Analyse how a rise in investment could lift a country’s economic growth rate.
(d)[8]
Discuss whether a country ought to change 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: “Pay/reward” …