CJC_H2_ECONS_P1_Mark_Scheme

1 © Catholic Junior College 973 2/01/Prelims /2016 Mark Scheme 2016 Catholic Junior College H2 Economics / 9732 Preliminary Examination Mark Scheme Paper 1

2 © Catholic Junior College 973 2/01/Prelims /2016 Mark Scheme Paper 1 – Case Study Questions Question 1 Globalisation and the Economy Extract 1: Too many immigrants, too quickly The story of Brexit is a complex one, but one thread may be familiar to some developed countries today, including Singapore: too many immigrants, too quickly. As the European Union (EU) expanded in 2004 from 15 member states to include 10 more countries - mostly poorer ones from Eastern Europe - then Prime Minister Tony Blair opened Britain's doors to job seekers from these countries. Free to move to Britain to work, many from the new EU countries did, attracted by the prospect of better jobs or higher pay than back home. Some parts of Britain’s working class felt the competition and the squeeze. Much of the fury of the ‘Leave’ campaigners focused around accusations that EU migrants were taking British jobs and depressing wages. Meanwhile, the big businesses and their consumers are gaining from this flow of cheap labour. Perhaps Britain had not fully considered the evolving ramifications of EU membership and the allowing of sudden mass movement of populations to an island nation. One pressure from mass movement is how immigration is changing the identity of the country and putting pressure on services like the National Health Service. The undoubtable truth is that developed countries need to find better strategies to manage the impacts of migration and promote integration. Source: The Straits Times, July 2016 Figure 1: Labour flow into the United Kingdom (UK), 2006 – 2015p (provisional) Source: Office for National Statistics 0 50 100 150 200 250 300 350 400 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015p Legend: Labour Flows from Non-EU countries Labour Flows from EU countries

3 © Catholic Junior College 973 2/01/Prelims /2016 Mark Scheme Extract 2: Will globalisation make everyone better off? Globalisation has made the planet more equal. As communication gets cheaper and transport gets faster, developing countries have closed the gap with their rich-world counterparts. Basic theory predicts that inequality falls when developing countries enter global markets, especially in the exchange of goods and services. With a larger proportion of their labour force being unskilled, this means that developing countries tend to produce goods that require labour-intensive processes. This increases their trade and thus, increases their wages. But the high inequality seen today in poor countries is prompting new theories. One emphasizes the recent pattern of outsourci ng which deviates from the usual practice of creating low-value jobs overseas — rich countries are increasingly shifting parts of the high- value production process to