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

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.

Passage

Employment Structure

Question 85 (1 of 7 Based on Passage)

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How does employment structure changes overtime?

Explanation

Stages of Development Countries

Primary Decreases

  • For farm workers mechanization reduces and rural workers migrate to the urban area.
  • Raw materials exhaust which leads to loss in mining jobs

  • Rural population decreases due to migration and people prefer better paid and less physical activity jobs.

Secondary Increases First then Decrease

  • Initially industrialization requires large number of workforces

  • Automation replaces factory jobs

  • Movement of manufacturing industries from MEDCs to NICs where availability of land and labor is cheaper.

Tertiary Increase

  • In urban areas the service sector is large and growing.

  • With the development of a country demand for service increases like education, tourism, heath.

  • Growth of jobs in the MEDCs in the knowledge economy which based on information and knowledge processing.

  • Increase is producer services.