Luxembourg is a nation with a very high level of economic development. Its government steps in to try to reduce some of the drawbacks that may arise in a market economic system. Some firms in the country operate in competitive markets, whereas others are monopolies. Households in the country save a large share of their income. Immigration is the chief reason for the country's population growth.
(a)[2]
Identify two factors that influence the proportion of income saved by households.
(b)[4]
Explain two characteristics of monopoly.
(c)[6]
Analyse the reasons for migration between countries.
(d)[8]
Discuss whether government intervention is able to overcome the disadvantages of a market economic system.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Interest rate” …