Using the information provided in Table 1, calculate the rate of unemployment for Burundi in 2019.

Explain why dependence on primary sector production may be considered a barrier to economic development.

Using the information in Figure 1, calculate the price elasticity of demand for gold in Burundi when price increases from US$1500 per oz to US$1800 per oz.

Using the information in Figure 1, calculate the change in the value of Burundi’s gold exports resulting from the increase in the price of gold from US$1500 per oz to US$1800 per oz.

Define the term progressive tax.

Calculate the amount of VAT which was paid on the purchase of this equipment.

Sketch an AD/AS diagram to illustrate the possible effect on the Burundian economy in the long run if the government reduces the rate of corporate income tax from 30 % to 26 %.

With reference to the data in Table 3, explain two ways in which gender inequality might act as a barrier to economic development in Burundi.

Using the text/data provided and your knowledge of economics, recommend a policy which could be introduced by the government of Burundi to reduce income inequality in Burundi.

$\frac{74 750}{4 908 500+74 750}\times 100$

Any valid working should be rewarded with [1].

= 1.5%

An answer of 1.5 or 1.5% without working is sufficient for [1].

N.B. An answer of 1.52 arises because of incorrect working and so should be awarded [0].

N.B. A response that links only to growth can be awarded a maximum of [3]. Similarly, if development is merely stated, but not linked, then a maximum of [3] is awarded.

$\mathrm{PED}=\frac{\%\mathrm{\Delta }𝑄\mathrm{d}}{\%\mathrm{\Delta }𝑃}=\frac{-20}{20}$

Any valid working (correct %Δ Qd or %Δ P, provided the formula is not inverted) is sufficient for [1]

= −1 or 1

An answer of −1 or 1 without any valid working is sufficient for [1].

N.B. A response in which the formula is inverted should be awarded [0].

Initial value = 1000 (70 − 25) × 1500 = 67 500 000

New value = 1000 (85 − 20) × 1800 = 117 000 000

Any valid working (initial or final value) is sufficient for [1].

Change in value = US$117 million − US$67.5 million

= US$49.5 million or US$49 500 000

An answer of 49.5 or 49.5 million or $49.5 million without any valid working is sufficient for [1].

N.B. For full marks to be awarded the response must provide valid working and include correct units.

(32 000/1.2) × 0.2

Any valid working should be rewarded with [1].

= Fbu 5333.33

An answer of 5333 without workings is sufficient for [1].

N.B. For full marks to be awarded the response must provide valid working and include correct units.

For AD/AS, the vertical axis may be Average (General) Price Level, or Price Level. The horizontal axis may be real output, real national output, real income, real national income, real GDP or real Y. Any abbreviation of the previous terms is acceptable. A title is not necessary.

N.B. A Keynesian diagram with AS shifting to the right and showing a higher (full employment/potential) output level is also acceptable.

A diagram which is not fully labelled may be awarded a maximum of [1].

Refer to paper 3 markbands, available under “your tests”  tab > supplemental materials.

Possible policies may include (but are not restricted to):

• a more progressive tax system
• investment in human capital (education or health)
• policies to promote women’s empowerment
• transfer payments
• wider tax base (more effective tax collection/reducing tax avoidance)
• policies to reduce inequalities of opportunity
• transfer payments
• targeted spending on goods and services, including merit goods
• policies to reduce discrimination
• minimum wage legislation
• any other valid policy.

N.B. If more than one policy is recommended, only the best policy should be rewarded, unless the policies are shown to be complementary or if they are compared/contrasted with the student’s one chosen policy.

Although stronger candidates were able to calculate the rate of unemployment accurately, it was surprising to see so many errors. Candidates often divided the number of unemployed by the number of employed or by the size of the population – or even inverted the formula.

Many candidates neglected to focus on the difficulties of over-reliance on the primary sector or made unsupported assertions, such as that in the primary sector “economies of scale are not possible”, “there is no innovation”, “prices are low” or “there is no infrastructure”. Such responses also tended to imply an impact on economic activity/growth without referring to development. Stronger candidates were able to link price volatility to income, living standards and development or to explain the significance of a low YED for many primary products.

Many candidates produced an answer of 1.25 as a consequence of using the final quantity as the denominator for the calculation of the percentage change.

Responses to this question were extremely poor. It was evident that some candidates were not familiar with the identification of exports on a trade diagram (as introduced in the new syllabus). Furthermore, some candidates who were able to calculate the quantity of exports were not able to multiply by the price in order to calculate the value. It was common to see responses in which candidates had merely calculated the changes in the value of domestic output or where the quantity of gold demanded had been multiplied by the price.

It was disappointing to see so many responses in which candidates referred to those on higher incomes paying “more tax” rather than referring to the percentage of income paid as tax. Additionally, a significant number of candidates referred to “richer households paying more tax than “poorer”, thus mixing wealth with income.

It is clear that many candidates had not been prepared adequately for this question. Such candidates incorrectly multiplied the level of expenditure by the tax rate. This calculation is specified in the subject guide, and illustrated in the specimen paper, thus it was disappointing that candidates in many centres were unable to perform the calculation accurately.

This question was answered poorly. The question required candidates to recognize that such a market-orientated supply-side policy would shift the LRAS (or the Keynesian AS) curve to the right. However, many candidates shifted the AD curve and/or the SRAS curve.

Although candidates were generally able to identify data relating to income inequality, many struggled to explain the link to economic development. Weaker responses suggested that less educated females cannot work or that those without bank accounts cannot receive income or spend. The significance for development of health, education or access to banking services was not explained well by many candidates. Marks were also lost for neglecting to make explicit reference to the data or to link to development. Furthermore, some responses presented a correlation between indicators and the HDI or GNI without attempting to explain causality.

A wide range of approaches were adopted for the “policy question”. Responses which scored well mostly:

• Selected one clear policy (or two complementary policies, such as increasing the higher rates of income tax and using the proceeds to provide transfer payments).
• Selected a policy listed in the subject guide, i.e. progressive taxes, policies to reduce inequalities of opportunity/investment in human capital, transfer payments, targeted spending on goods and services, universal basic income, policies to reduce discrimination, minimum wages.
• Ensured that the upper levels of the five strands set out in the markbands were satisfied – full explanation of an appropriate policy, incorporation of theory to support the explanation, use of relevant terminology throughout the response, use of data provided to support the recommendation and balanced synthesis/evaluation.

Responses were able to achieve full marks with a fairly concise answer which met these requirements. Diagrams, although not expected/required) were often used effectively to support the theory/explanation.

Candidates who did not score highly tended to demonstrate some of the following weaknesses:

• Outlining several policies while not explaining them in any detail.
• Writing long, unfocused answers.
• Neglecting to use the data provided to support the answer. Some candidates included data in a descriptive manner, which did not help to justify the recommendation. Responses which suggested increasing the rate of (progressive tax) and used the comparative rates in other countries correlated with the Gini coefficient to justify this approach were rewarded.
• Neglecting to provide a balanced synthesis. Many answers simply explained one or more ideas without any balance.
• Focusing on growth/development without making any connection to income inequality. Often this included a long explanation of several interventionist supply-side policies. Some focused on increased mining for minerals, arguing that the increased employment would reduce income inequality whereas it might arguably do the opposite.
• Using economic terms incorrectly e.g. classifying spending on (female) education as expansionary fiscal policy – even when the response suggested that it could be financed by a more progressive tax system.
• Devoting far too much time to explaining a Lorenz curve and Gini coefficient instead of explaining how the policy would achieve greater income equality.
• Focusing only on gender equality.
• Taking insufficient note of the data provided. Many responses suggested the adoption of a progressive tax system even though such a system already existed.