IGCSE Development Studies: Specimen Questions with Answers 26 - 27 of 98

Passage

GNP data of South Africa is as follows:

  • South Africa GNP for was $ 0. 00B, a 100% decline from 2,019.
  • South Africa GNP for 2,019 was $ 353. 53B, a 6. 38% increase from 2,018.

  • South Africa GNP for 2,018 was $ 332. 32B, a 7. 74% increase from 2,017.

  • South Africa GNP for 2,017 was $ 308. 44B, a 0. 34% increase from 2,016.

Question 26 (4 of 6 Based on Passage)

Edit

Write in Short

Short Answer▾

What are the effects of decline in GDP?

Explanation

GDP is the worth of net produce in a country in a given financial year. For example- If it is said that a countries GDP fell by 2% it means that the country’s produce in the last year has fallen by 2% . The reasons for fall in GDP can be –

  • Fall in the demand by the consumers.
  • Adverse impact on manufacturing and service sector affected due to natural causes like, monsoon.

GDP is the report prepared at the end of the financial year. Effect of decline in GDP on an economy is as follows:

  • Unemployment: A reduction in production means that less people are employed which leads to less amount of money with the people to make purchases.

  • Market situation won’t be a good one

  • A fall in GDP will result in reduction in the size of the economy.

  • A decrease in the GDP will cause a fall in the average rate of interest in an economy.

Question 27 (5 of 6 Based on Passage)

Edit

Write in Short

Short Answer▾

Is South Africa a developed country or developing country?

Explanation

South Africa has in abundance natural resources and goods; it has made a remarkable progress in the industrial sector but it is still counted as a developing nation. South Africa has self-sufficiency, investment in exports is the main source of revenue for the government and exchange flows to deal with import, largest contributor to the GDP of the country is industrial sector with 33% and service sector with 66% , the country is rich in natural resource and has cheap labor. Despite all the possibilities South Africa is a developing nation because-

  • Export and domestic investment have a positive impact on the growth of the economy but the imports have a negative impact.
  • The added value of agriculture and imports is very low in South Africa

  • South Africa has very unfavorable environment for agriculture and capacities to invest in the agricultural sector.

  • In South Africa agriculture is the only sector which can help in removing unemployment and eradicating poverty.