IGCSE Economics Paper-2: Specimen Questions with Answers 97 - 98 of 100

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Passage

Labor intensive industry requires a large amount of labor to produce goods and services. In contrast to capital intensive which requires less amount of labor? Example 10 workers can produce 10,000 products per day.

Question 97 (1 of 4 Based on Passage)

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Short Answer▾

What is the role of government in improving the health of the labor-intensive industries?

Explanation

The Role of Government in Improving the Health of the Labor-Intensive Industries is as Follows

  • The Government has invested a huge amount on infrastructural projects and if they are executed in a proper manner then it will create more jobs in the labor industries.
  • Exports which can also raise demand of consumer when they grow fast. Exports will improve the competitiveness of an economy.
  • Government is taking actions to remove the problems like building better ports and shortening the time of transportation and enhance regular power supply.
  • Training the unskilled labors in skills is also very important to upgrade the productivity of workers. This will make exports more cost effective in the international markets.
  • Investment and gross fixed capital formation are also some factors that will improve the health of labor industries.

Question 98 (2 of 4 Based on Passage)

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Short Answer▾

What is the impact of GST on labor intensive industries?

Explanation

The Impact of GST on Labor-Intensive Industries is as Follows

  • Post implementation of GST the growth of labor-intensive industry was declining. It was because of the tedious paperwork and strict compliance.
  • Labor-intensive sectors were not able to cope with the adverse of GST, which came close to demonetization in India.
  • The increased cost resulted in an increase in the working capital needs of exporters.
  • Supply chains were majorly affected and the industrial production was seriously hampered.
  • Due to large share of the unorganized labor-intensive sectors had to bear the effects of GST.
  • Imports increased drastically in these industries. Historically, exports/imports of these sectors have moved in tandem.
  • It has an impact on their revenue growth.
  • It will also have an impact on employment.

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