IGCSE Development Studies: Specimen Questions with Answers 27 - 28 of 98

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Passage

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 27 (5 of 6 Based on Passage)

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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 28 (6 of 6 Based on Passage)

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Distinguish between GNP and GDP

Explanation

Distinguish between GNP and GDP
S. No.GNPGDP
1.GNP is a national conceptGDP is a territorial concept
2.GNP is a wider conceptIt is relatively a narrower concept
3.Formula of income from abroadFormula of GDP = P (G) + P (S)
4.If we subtract net factor income from abroad from it, we get GDPIf we add NFIA to it, we get GNP
5.GNP will be greater than GDP when NFIA is positive.When NFIA is negative it GDP will be greater than GNP.

2.

External Debt

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