IGCSE Development Studies: Specimen Questions with Answers 84 - 85 of 98

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Question 84

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What do you understand by External debt?

Explanation

External debt or external loan is the total amount which the residents of one country owe to the other the country. In other words, it is the outstanding amount of the principal amount along with the interest by the debtor to the creditor.

  • It is the borrowing from foreign lenders through government, commercial banks, or financial institution. IMF keeps a record of a country՚s debt whereas, World Bank publishes the quarterly report on debt of a country.
  • In case of nonpayment of debts, a country faces financial crisis known as sovereign debts, Lenders of fund can withhold the assets of the borrowing nation in such cases leading to a fall in the value of the currency of the borrowing nation having an adverse effect on the growth of the economy.

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Employment Structure

Question 85 (1 of 7 Based on Passage)

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What is an employment structure?

Explanation

Employment structure refers to how the work is divided among three main sectors of employment:

  • Primary sector
  • Secondary sector
  • Tertiary sector

In the early stages of development countries have a high percentage of population engaged in the agriculture sector. Then as the country develops further it shifts its employment structure from primary to secondary i.e.. from agricultural to Industrial and in the final stage of development of a country a country undergoes the growth in tertiary sector i.e.. the service sector. Employment structure of countries is usually displayed through pie charts. They are the diagrams that show the percentage of each sector in a society and the percentage of each sector changes as a country՚s development level increases.

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