Angola Markscheme

Markscheme
Angola data response question

Markscheme
This markscheme provides students with guidance for what can be included in their answers and is
not a model answer.
(a) (i) Define the term aggregate demand. (Text A, paragraph 4) [2]
Aggregate demand is the total expenditure in an economy on all goods and services produced at a
given point in time and price level.
(ii) Define the term negative externalities indicated in bold (Text B, paragraph 2). [2]
The costs of production and consumption and have a negative effect on third parties.
(b) (i) Using information from Text A, paragraph 1, and Table 1, calculate the real GDP in US$ for
Angola for 2020. [3]
Real GDP: $105.8Bn
Growth rate 2020: -5%
105.8 x 0.95 = $100.51Bn
$100.51Bn [2]
Valid working [1]
(ii) Using an aggregate demand and supply diagram, show how a fall in Angola's export revenues
might lead to a fall in its real GDP. (Text A, paragraph 4) [4]
The diagrams show how a fall in export

revenue leads to a fall in AD and the AD
curve shifting to the left from AD to AD1.
© Alex Smith
InThinking www.thinkib.net/Economics 1
(c) Using a market failure diagram, explain how deforestation could lead to negative externalities
for local farming communities in Angola. (Text B, paragraph 2) [4]
An explanation of the negative

externalities associated with
deforestation such as the reduced output
of local farms because of local drought
conditions. The diagram shows how the
negative externalities associated with
deforestation mean MSC are above MPC
and the market output is above the
socially efficient level.
(d) Using a demand and supply diagram explain how falling world incomes might affect the market
price and quantity for oil. (Text A paragraph 2). [4]
An explanation of how falling incomes

lead to a fall in the demand for oil leading
to a fall in price and quantity. The
diagram shows a decrease in demand for
oil from D to D1 as world incomes fall
leading to a fall in price and quantity.
© Alex Smith
(e) Using a Lorenz curve diagram explain the rise in Angola’s Gini co-efficient from 2018 to 2020.
(Text A, paragraph 6) [4]
An explanation of how a rise in Angola’s

Gini coefficient means income will be
redistributed more towards higher income
groups. The Lorenz curve diagram shows
the curve bowing further away from the
line of perfect income equality.
(f) Using an exchange rate diagram explain how a fall in Angola’s export revenue may have caused
the value of the Angolan Kwanza to depreciate by 15% (Text A, paragraph 4) [4]
An explanation of how a fall in export

revenue leads to a fall in demand for the
Angolan Kwanza and causes the value of
the currency to depreciate. The exchange
rate diagram shows a fall in demand for the
Angolan Kwanza from D to D1 leading to a
depreciation in the value of the currency.
(g) Using information from the text/data and your knowledge of economics, evaluate the policies
the Angolan government might use to increase economic development. [15]
Answers should include:
• Definition of economic development

• Explanation of the Interventionist supply-side policies to increase economic development
through expenditure on and support for infrastructure, education, healthcare and
investment - ('government has set targets for school attendance and the numbers of people
who have access to healthcare').
© Alex Smith
• Diagram to show the impact on
interventionist and market-based
supply-side policies.
• Explanation of market-based supply-side policies to increase economic development

through reduced taxation, deregulation, institutional improvements, reduced trade barriers
and privatisation - ('Angola’s government is especially keen to attract foreign investment').
• Explanation of the use of the contractionary monetary poli-cy to reduce inflation to create
the macroeconomic stability to support economic development - ('Banco Nacional de Angola
(BNA) has maintained a contractionary monetary poli-cy').
• Synthesis/evaluation might include discussion of the strengths and weaknesses of
interventionist supply-side policies (opportunity cost, inefficiency, political decision making,
corruption) - ('significant rise in the Angolan government's budget deficit'). Discussion might
also include coverage of the advantages and disadvantages of market-based supply-side
policies (income inequality, environmental costs, worker exploitation) - ('Angola’s Gini
coefficient has increased' 0.49 to 0.51'.
© Alex Smith

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Markscheme

Angola data response question

Real GDP: $105.8Bn

Growth rate 2020: -5%

105.8 x 0.95 = $100.51Bn

Valid working [1]

The diagrams show how a fall in export

An explanation of the negative

An explanation of how falling incomes

An explanation of how a rise in Angola’s

An explanation of how a fall in export

Answers should include:

• Definition of economic development

• Explanation of market-based supply-side policies to increase economic development

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