Economic Growth & Development Strategies (DP IB Economics: HL)

Exam Questions

15 mins7 questions
12 marks

Text A, Paragraph 4

Ghana has made significant strides in attracting foreign direct investment (FDI) through various economic reforms in the hope that multinational corporations (MNCs) will bring technological advancements, employment, and global expertise to all sectors.

Define the term foreign direct investment indicated in bold (Text A, Paragraph 4).

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23 marks

Text A, Paragraph 1

Ghana, located in West Africa, is one of the fastest-growing economies in the region, with $72.8 billion GDP in 2021, up from $32.3 billion in 2011. The country's economy is diversified, with sectors ranging from agriculture and mining to manufacturing and services.

Table 1: Ghana statistics

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Table 1

Using information from (Text A, Paragraph 1), and Table 1, calculate the value of foreign aid into Ghana as a percentage of FDI net inflows into Ghana in 2021.

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32 marks

Text A, Paragraph 3

The costs of doing business in Indonesia are high due to paperwork and perplexing protocols. The government has adopted policies to improve this. These policies aim to create certainty and transparency for foreign investors and to empower small businesses, which play a critical part in Indonesia’s economy. Other policies, such as obtaining loans and encouraging microfinance institutions, make it easier to gain access to credit.

Define the term microfinance indicated in bold (Text A, paragraph 3).

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42 marks

Text A, Paragraph 2
Governments around the world often intervene in certain sectors to ensure that beneficial services and products are accessible to the public. These services, such as education and healthcare, are considered merit goods, which generate third party benefits to the economy.

Define the term merit goods as indicated in (Text A, Paragraph 2).

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52 marks

Text C, Paragraph 2
In many countries, tax systems are designed to ensure that income is distributed more fairly. This approach, known as progressive taxation, is intended to reduce income inequality by redistributing wealth.

Define the term progressive taxation as indicated in (Text C, Paragraph 2).

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62 marks

Text C, Paragraph 3
Countries around the world, particularly in developing regions, have been focusing on improving basic facilities to support economic growth. These improvements include large-scale infrastructure projects, which are considered vital for connecting rural areas with urban centres and improving access to markets. Governments and international agencies have committed significant funds to these projects to stimulate economic development.


Define the term infrastructure projects as indicated in (Text C, Paragraph 3).

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72 marks

Text E, Paragraph 3
In recent years, there has been a push for changes in the way governments operate, particularly in developing countries. These reforms aim to instigate institutional change so that development benefits are distributed more equitably across society.

Define the term institutional change as indicated in bold (Text E, Paragraph 3).

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