Which of the following is most likely to explain why one country has a higher level of economic development than another?
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B — Education and training raise the productivity of labour, which is a major cause of higher development; A is wrong because a larger population on its own does not raise income per head.
Which of the following is most likely to be a consequence of low levels of economic development?
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A — When incomes and job opportunities are low, skilled workers often move abroad; B is wrong because low development is linked with lower, not higher, life expectancy.
Country A has a GDP of $60 billion and a population of 20 million. Country B has a GDP of $450 billion and a population of 10 million. What is the difference in GDP per head between the two countries?
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C — Country A's GDP per head is $3,000 and Country B's is $45,000, so the difference is $42,000; A is the distractor that gives only Country A's figure.
GDP per head is often used to compare levels of development between countries. Why can it give an incomplete picture?
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D — GDP per head is an average and hides inequality and poor access to services; A is wrong because GDP per head is calculated by dividing GDP by the population.
Country Z has a fast-growing population, very low levels of saving and little investment in new machinery. What is the most likely result?
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B — Low saving means low investment, and a fast-growing population spreads any extra output over more people; A is wrong because these conditions do not produce rapid growth in income per head.
Why does investment in education and training usually raise a country's level of economic development?
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A — Better educated and trained workers produce more output per hour; B is wrong because education does not create natural resources.
Country R has large oil reserves, but its GDP per head is low and many people live in poverty. Which of the following best explains this?
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C — Resource wealth only raises development if the income is used productively and is not lost through corruption or conflict; D is wrong because oil-rich countries do not automatically lack workers.
Which of the following geographical factors is most likely to hold back economic development?
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D — Disease and poor soil reduce the productivity of labour and land; A is wrong because a reliable climate and rainfall usually support farming.
A country has suffered a long civil war. Which of the following is the most likely economic consequence?
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C — War destroys factories, roads and other capital and makes firms unwilling to invest; D is wrong because conflict usually reduces output rather than raising it.
Why can poor transport, unreliable electricity and weak communications hold back economic development?
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A — Weak infrastructure adds to firms' costs and makes investment less attractive; B is wrong because poor infrastructure means less capital, not more.
A low-income country spends a large share of its export earnings on repaying foreign debt. What is the most likely consequence?
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B — Debt repayments take money that could be spent on health and education; D is wrong because repaying debt does not raise output per person.
Which of the following is a common consequence of differences in economic development between countries?
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D — Poorer countries often rely on primary products while richer countries export more manufactured goods and services; B is wrong because low-income countries do trade internationally.
Which of the following is most likely to reduce the gap in economic development between rich and poor countries?
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B — Improving education, health and infrastructure raises productivity and incomes in poor countries; A is wrong because tariffs restrict poor countries' exports and widen the gap.
Country P has a GDP per head of $2,000. It grows by 5% in one year. By how much does GDP per head rise?
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C — 5% of $2,000 is $100; B is the distractor for students who work out 2.5% instead of 5%.
Which statement about the causes of differences in economic development between countries is correct?
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A — Development differences result from many interacting economic, social and political factors; B is wrong because climate is only one influence among many.