1 → (b) · 2 → (b) · 3 → (b) · 4 → (a) · 5 → (b) · 6 → (c).
A Section A — answers
1 → (b) · 2 → (b) · 3 → (b) · 4 → (a) · 5 → (b) · 6 → (c).
B Section B — indicative content
Key terms
What examiners are looking for
1. (4) Primary product dependency leaves Z exposed to commodity price volatility (the Prebisch-Singer hypothesis): the fall in coffee prices cut export earnings and widened the deficit, giving the economy unstable income. 2. (6) A depreciation makes exports cheaper and imports dearer, so the current account improves if Marshall-Lerner holds — but the J-curve means it worsens first. Credit an accurate exchange-rate or J-curve diagram. 3. (10) Trade liberalisation could bring market access, FDI, efficiency, lower prices and technology — but risks infant-industry damage, structural unemployment and deeper dependency. The net effect depends on Z's competitiveness and stage of development.
C Section C — essay plans
Evaluation
Top-band ingredients
Essay 1 (free trade & development): analyse comparative-advantage gains, lower prices, FDI and growth. Evaluate with infant industries, over-specialisation and primary-product dependency, a declining terms of trade (Prebisch-Singer) and structural unemployment. Conclude: it depends on the stage of development and whether domestic industries can compete.
Essay 2 (depreciation & the deficit): analyse a depreciation making exports cheaper and imports dearer (diagram). Evaluate the J-curve, the dependence on the Marshall-Lerner condition, imported inflation, the risk of retaliation/competitive devaluation, and supply-side alternatives. Conclude on elasticities and the time frame.
Essay 3 (development strategies): contrast market-orientated (trade liberalisation, FDI, privatisation) with interventionist (human capital, infrastructure, protectionism) and other strategies (debt relief, aid, tourism). Evaluate using institutions, corruption and the country's specific constraints. Conclude: the best results usually blend approaches.
Exam tip
Final reminder
In every 20-marker: define → analyse with a labelled diagram → evaluate with MICE → justified conclusion. For Unit 4, the conclusion almost always turns on elasticities, the time frame, or a country's stage of development.
Viewing only
This content is free to read on superexams.com and cannot be printed or downloaded.
Read the full note, free
Create a free account to read this note in full. Every free account gets 2 complete revision notes, no card needed.