With a population of $3.5$ million, Moldova is one of Europe’s poorest countries and living standards are relatively low. In $2015$, the economy entered recession and inflation doubled. Moldova’s central bank lifted its interest rate from $8.5\%$ to $15.5\%$.
(a)[2]
Identify two factors that affect the size of a country’s population.
(b)[4]
Explain two reasons for an increase in living standards.
(c)[6]
Analyse how a rise in the rate of interest might raise unemployment.
(d)[8]
Discuss whether a government ought to raise tax rates during a recession.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Rate of births” …