Developments in the Global Economy

Worked examples (6)

• 1Winner or loser from globalisation?
• 2MNC benefit or cost to the host country?
• 3Explain how globalisation lowers prices for consumers
• 4Why globalisation can cause structural unemployment
• 5Examine two effects of MNCs on a host country
• 6Evaluate whether globalisation benefits developing countries most

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine two… (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks), KAA (8) + Evaluation (6), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8

Worked examples (6)

• 1Characteristic or driver of globalisation?
• 2Outsourcing vs offshoring vs FDI
• 3Explain what is meant by foreign direct investment
• 4Analyse two characteristics of globalisation
• 5Examine two causes of globalisation
• 6Evaluate whether technology is the main driver of globalisation

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Application (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks), KAA (8) + Evaluation (6), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8

Worked examples (6)

• 1Classify absolute vs comparative advantage
• 2Calculate an opportunity cost (Q7(a) style)
• 3Identify comparative advantage and who specialises
• 4Explain what comparative advantage means (Q7(c) style)
• 5Analyse the gains from specialisation and trade (Q7(b) style)
• 6Examine two limitations of the theory (Q7(d) style)

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (extended to 8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate essay, KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Calculate the terms of trade from price indices
• 2Classify: improvement or deterioration?
• 3Calculate the terms of trade when both indices change
• 4Analyse how a commodity-price fall affects the terms of trade
• 5Explain how an appreciation affects the terms of trade
• 6Examine whether an improvement helps the current account

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section C style — Evaluate (KAA 12 marks + Evaluation 8 marks), best-fit levels

Worked examples (6)

• 1Identify u0026 classify: developed vs emerging trade characteristics
• 2Distinguish the volume from the value of trade
• 3Calculate the % change in export volume
• 4Calculate a country's share of world exports
• 5Analyse why the pattern of trade shifted to emerging economies
• 6Examine two determinants of a country's trade pattern

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks), Levels 1–2
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Classify an exchange-rate move as SPICED or WPIDEC
• 2Work out the effect of a depreciation on an export price
• 3Test the Marshall–Lerner condition
• 4Analyse a depreciation on the current account
• 5Draw and explain the J-curve
• 6Analyse an appreciation's effect on inflation and growth

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), diagram expected, KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks) — KAA (8) + Evaluation (6)
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks) — KAA (12) + Evaluation (8), best-fit levels

Worked examples (6)

• 1Classify the type of trading bloc
• 2Trade creation or trade diversion?
• 3Explain what a customs union is
• 4Analyse trade creation from joining a bloc
• 5Show that the CET causes trade diversion
• 6Examine two benefits of joining a trading bloc

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explanation (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks), KAA (8) + Evaluation (6), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8, best-fit levels

Worked examples (6)

• 1Classify an argument for protection
• 2Distinguish a tariff from a quota
• 3Identify the welfare areas on a tariff diagram
• 4Calculate the tariff revenue
• 5Explain an argument against protection
• 6Compare a tariff with a producer subsidy

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Knowledge and application (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), diagram expected, KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), diagram expected
• ✓Model answer — WEC14/01 Section C style — Evaluate essay, KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Convert a value using an exchange rate
• 2Percentage change in the exchange rate
• 3Classify systems and rate changes
• 4Show a depreciation on the forex diagram
• 5Higher interest rates cause an appreciation
• 6Examine an advantage of a floating rate

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks), point-marked
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks), point-marked
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), diagram expected, KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), Levels 1–3, KAA
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), diagram expected
• ✓Model answer — WEC14/01 Section C style — Evaluate essay (answer TWO), KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Identify and classify: which account and component?
• 2Calculate the current-account balance from components
• 3Financing the deficit: the zero-sum identity
• 4Analyse a cause of a current-account deficit
• 5Examine a policy to reduce a current-account deficit
• 6Express the deficit as a percentage of GDP

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks)
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks)
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate: KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Define international competitiveness
• 2Calculate a change in relative unit labour costs
• 3Classify price vs non-price competitiveness
• 4Identify the determinant and its channel
• 5Trace why competitiveness matters
• 6Evaluate a weaker currency as a route to competitiveness

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks)
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks): KAA (12) + Evaluation (8), best-fit levels

Worked examples (6)

• 1Absolute or relative poverty?
• 2Name the cause of poverty
• 3Explain why absolute and relative poverty differ
• 4Analyse the poverty trap
• 5Examine two policies to reduce poverty
• 6Evaluate whether growth is the best way to cut poverty

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Application (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8

Worked examples (6)

• 1Identify and classify: income vs wealth inequality
• 2Interpret a Gini coefficient
• 3Identify and classify a cause of inequality
• 4Describe the Lorenz curve on a diagram
• 5Compare two Lorenz curves and their Gini values
• 6Evaluate a policy to reduce inequality

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explanation (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), diagram expected, KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), diagram expected
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks) — KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Classify current, capital and transfer spending
• 2Calculate public spending as a % of GDP
• 3Explain what a transfer payment is
• 4Analyse why public spending rises as economies develop (Wagner's law)
• 5Analyse how higher capital spending raises growth (diagram)
• 6Examine reasons for rising public expenditure

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — KAA (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — KAA (8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — KAA (12 marks) + Evaluation (8 marks), best-fit levels (candidates answer TWO of three)

Worked examples (6)

• 1Classify taxes as direct or indirect
• 2Classify a tax as progressive, proportional or regressive
• 3Calculate the average and marginal tax rate
• 4Draw and interpret the Laffer curve
• 5Apply Adam Smith's canons to judge a tax
• 6Distinguish tax avoidance from tax evasion

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, KAA)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — KAA (6 marks), Levels 1–3, diagram expected
• ✓Model answer — WEC14/01 Section B, Q7(d) style — KAA (8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks)
• ✓Model answer — WEC14/01 Section C style — Evaluate, KAA (12 marks) + Evaluation (8 marks), answer TWO of three

Worked examples (6)

• 1Classify: deficit (flow) vs debt (stock); structural vs cyclical
• 2Calculate national debt as a % of GDP
• 3Calculate how a deficit changes the national debt
• 4Explain structural vs cyclical deficits and automatic stabilisers
• 5Analyse two causes of a rising fiscal deficit
• 6Examine two consequences of a high national debt

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — KAA (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — KAA (8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate (KAA 12 marks + Evaluation 8 marks), best-fit levels

Worked examples (6)

• 1Classify the policy family
• 2Match the policy to the objective it targets
• 3Routes to a smaller current-account deficit
• 4Diagnose the unemployment, then match the policy
• 5Why the toolkit is weaker in a developing economy
• 6Identify the objective conflicts in a policy mix

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Define (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks), KAA 8 + Evaluation 6
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8

Worked examples (6)

• 1Identify u0026 classify the policy problem
• 2Classify the type of conflict or lag
• 3Explain how a time lag makes policy pro-cyclical
• 4Explain crowding out as a limit of fiscal policy
• 5Examine a developing-economy constraint
• 6Discuss whether monetary policy can end a deep recession

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Define (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks): KAA (8) + Evaluation (6), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate essay: KAA (12) + Evaluation (8), best-fit levels

Worked examples (6)

• 1Interpret an HDI value
• 2Calculate and interpret GNI per capita
• 3Identify: growth or development?
• 4Identify the HDI dimension
• 5Analyse why GNI per capita is a poor development measure
• 6Examine the strengths and weaknesses of the HDI

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Calculate/interpret (2 marks)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Explain (4 marks)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — KAA (8 marks) + Evaluation (6 marks), Levels 1–3
• ✓Model answer — WEC14/01 Section C style — Evaluate essay — KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Economic or institutional constraint?
• 2Name the constraint from its mechanism
• 3Explain the savings-gap vicious circle
• 4Why primary product dependency causes volatile earnings
• 5Examine two constraints in a developing economy
• 6Evaluate whether PPD is the most serious constraint

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Knowledge and application (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss, KAA (8 marks) + Evaluation (6 marks), best-fit levels
• ✓Model answer — WEC14/01 Section C style — Evaluate, KAA (12 marks) + Evaluation (8 marks), best-fit levels

Worked examples (6)

• 1Define FDI and microfinance
• 2Classify strategies as market-led or interventionist
• 3Classify types of aid and industrialisation strategy
• 4Build the chain: how FDI promotes development
• 5Explain the Lewis model and an interventionist route
• 6Match each measure to its main limitation

Model answers (6)

• ✓Model answer — WEC14/01 Section B, Q7(a) style — Knowledge (2 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(c) style — Knowledge and application (4 marks, point-marked)
• ✓Model answer — WEC14/01 Section B, Q7(b) style — Analyse (6 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(d) style — Examine (8 marks), KAA Levels 1–3
• ✓Model answer — WEC14/01 Section B, Q7(e) style — Discuss (14 marks), KAA 8 + Evaluation 6
• ✓Model answer — WEC14/01 Section C style — Evaluate (20 marks), answer two of three, KAA 12 + Evaluation 8