IGCSE Development Studies: Specimen Questions with Answers 7 - 8 of 98

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Indicators Poverty in a Country

Question 7 (7 of 7 Based on Passage)

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Explain what do you mean by 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.

Passage

Removing Poverty

Question 8 (1 of 7 Based on Passage)

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Discuss two ways of removing poverty.

Explanation

One of the biggest challenges of the world is poverty eradication. In alleviating poverty private sector plays a major role in increasing growth of the economy, employment generation and purchasing options for reduction in poverty.

The ways to reduce poverty are:

  • Jobs creation: The best way to overcome poverty is to create well-paying jobs. The central government aim should be of increasing investment in strategies for job creation like, industrial development, infrastructural development, renovation of abandoned houses, developing renewable energy resource and other investments that aim at boosting the economic growth and helps in creation of jobs.
  • Raise minimum wages: By raising the minimum wage and indexing it to inflation would lift majority of the population of the world out of poverty.

Agricultural Trade between USA and Mexico