IGCSE Development Studies: Specimen Questions with Answers 25 - 26 of 98

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GNP data of South Africa is as follows:

  • South Africa GNP for was $ 0.00 B, a 100 % decline from 2019.
  • South Africa GNP for 2019 was $ 353.53 B, a 6.38 % increase from 2018.
  • South Africa GNP for 2018 was $ 332.32 B, a 7.74 % increase from 2017.
  • South Africa GNP for 2017 was $ 308.44 B, a 0.34 % increase from 2016.

Question 25 (3 of 6 Based on Passage)

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Give three reasons of developing country՚s economic problem.

Explanation

Economic Problems Face by a Developing Country Are as Follows

Economic Challenges

  • Transition from free market economies produce, rising standards of living and expanding middle class
  • “Brain drain” – migration of residents to other countries for education or job.
  • Increasing gap between the rich and poor.

Political Challenges

  • Increasing demand for political freedoms and individual rights.
  • Example- Increasing demand for political freedom in Taiwan and South Korea.

Factor Markets

  • Capital markets less efficiently in many developing countries while channeling money to the most productive use.
  • Labor markets work in a less efficient manner where the wage gap between expanding and declining sectors is high.

Question 26 (4 of 6 Based on Passage)

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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.

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