Question 1
Between 2000 and 2022 globalisation was a significant factor that led to an increase in average incomes in Indonesia. However, income inequality within the country also increased during the same period. Evaluate reasons why globalisation may lead to an increase in income inequality within a country. Refer to a country of your choice in your answer.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
QS9: Interpret, apply and analyse information in written, graphical, tabular and numerical forms.
Knowledge, Application and Analysis ( 12 marks) - indicative content
- Understanding of globalisation
- Understanding of income inequality
Reasons may include:
- Inward migration of low-skilled workers may depress wage rates and
could widen the wage gap between skilled or semi-skilled, and unskilled workers who are likely to experience a reduction in their relative wage
- Skilled workers can earn higher incomes as there will be increased global
demand for their services
- Workers who are mobile and who have the skills can move from declining to expanding industries
- Workers who lack the skills and occupational mobility are likely to face structural unemployment
- Businesses may gain greater profits as they are able to locate to low-
cost countries, and therefore workers in developed economies may be
made redundant
N.B. Accept why globalisation increases income inequality as KAA and why it does not as EV, or vice versa
N.B. Award maximum of Level 3 ( 9 marks) if a candidate does not refer
to a country(s) in their answer
Level
Mark Descriptor
0 No rewardable material.
Level 1
1-3
Displays isolated, superficial or imprecise knowledge and understanding of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate examples.
Descriptive approach which has no chains of reasoning.
Level 2
4-6
Displays elements of knowledge and understanding of economic terms, principles, concepts, theories and models.
Limited application of knowledge and understanding to economic problems in context.
A narrow response or superficial, only two-stage chains of reasoning in terms of cause and/or consequence.
Level 3
7-9
Demonstrates accurate knowledge and understanding of economic terms, principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the question. Some evidence and contextual references are evident in the answer.
Analysis is clear and coherent. Chains of reasoning in terms of cause and/or consequence are evident but they may not be developed fully or some stages are omitted.
Level 4
10-12
Demonstrates accurate and precise knowledge and understanding of economic terms, principles, concepts, theories and models. Ability to link knowledge and understanding in context using appropriate examples which are fully integrated to address the broad elements of the question.
Analysis is clear, coherent, relevant and focused. The answer demonstrates logical and multi-stage chains of reasoning in terms of cause and/or consequence.
Evaluation (8 marks) - indicative content
- Improvements in labour mobility as a result of globalisation might help to reduce income inequality
- Economic growth resulting from globalisation could lead to an increase in tax revenue for governments that may be spent on raising incomes of low-income groups
- TNCs usually spend on training, so human capital may increase resulting in a decrease in unemployment and income inequality
- Higher profits of businesses can be used to raise wages of unskilled workers
- Increased protectionism may be reducing the impact of globalisation on income inequality
- Higher average incomes associated with globalisation might not necessarily result in increased income inequality i.e. the impact is unlikely to be the same for different countries
- Other factors are more important than globalisation in causing inequality
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-3
Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2
4-6
Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3
7-8
Evaluation recognises different viewpoints and/or is critical of the evidence, leading to an informed judgement.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.