Practice exam questions

Development economics - new essays for practice

  • Levels: A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

I've put together some new practice essay questions for students covering economic development. Here they are.

Foreign direct investment

Foreign direct investment (FDI) inflows to developing countries in Asia rose by 3.9% to US$512 billion in 2018, according to UNCTAD’s World Investment Report 2019. Growth occurred mainly in China, Hong Kong (China), Singapore, Indonesia and other countries that belong to the Association of Southeast Asian Nations, as well as India and Turkey. The region remained the world’s largest FDI recipient, absorbing 39% of global inflows in 2018, up from 33% in 2017. Asia also hosts more than 4,000 special economic zones - three quarters of the world total.

Question: With reference to examples of specific developing countries, evaluate the potential benefits of inward foreign direct investment.

Our study resources on the economics of foreign direct investment can be found here

Remittances

The money workers send home to their families from abroad has become a critical part of many economies around the world. The World Bank estimates that global remittances reached a total of $689 billion in 2018, up from $633 billion in 2017. In 2018, Mexico received over $35 billion in remittances as migrant workers sent money home. India is the highest remittance recipient, the World Bank revealed that the country got $79 billion in remittances in 2018.

Question: With reference to examples of specific countries, evaluate the potential benefits of remittances for economic development.

Our study resources on the economics of remittances can be found here

Overseas aid

A long-standing United Nations target is that developed countries should devote 0.7% of their gross national income to ODA. For some countries such as Rwanda (13% of GDP), Malawi (24% of GDP) and Samoa (16%) overseas aid is a very high percentage of their annual GDP.

Question: With reference to examples of specific countries, evaluate the potential benefits of inflows of overseas aid to promote economic development.

Our study resources on the economics of overseas aid can be found here

Poverty reduction

More than a third of the world lived in extreme poverty 30 years ago. Today, less than 10% of people live on $1.90 a day or less (PPP). Between 2000 and 2015, 15 countries lifted 802.1 million people out of extreme poverty, according to a new analysis of World Bank poverty data. Half of the world’s 736 million extremely poor people lived in just 5 countries in 2015: India, Nigeria, Democratic Republic of Congo, Ethiopia, and Bangladesh, according to the most recent data available.

Question: With reference to examples of specific countries, assess two policies that might be effective in achieving a reduction in extreme poverty.

Our study resources on the economics of poverty reduction can be found here

Debt

Total emerging and developing economy debt reached almost 170% of gross domestic product in 2018 – or $55tn – an increase of 54 percentage points of GDP since 2010. China accounted for the bulk of the increase – in part due to its size – but the build-up was broad-based, and included other big emerging economies such as Brazil. The World Bank fears that high levels of debt can make developing economies vulnerable to large depreciations and capital outflows, particularly when it is financed from abroad.

Question: With reference to examples of specific countries, evaluate the potential benefits of developing nations borrowing to accelerate their economic growth and development.

Our study resources on the economics of debt can be found here

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