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Cambridge International AS & A Level: Economics 9708/42 October/November 2022

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Cambridge International AS & A Level

ECONOMICS 9708/42
Paper 4 Data Response and Essays October/November 2022
MARK SCHEME
Maximum Mark: 70

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2022 series for most
Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level
components.

This document consists of 15 printed pages.

© UCLES 2022 [Turn over


9708/42 Cambridge International AS & A Level – Mark Scheme October/November
PUBLISHED 2022

Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.

GENERIC MARKING PRINCIPLE 2:

Marks awarded are always whole marks (not half marks, or other fractions).

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.

GENERIC MARKING PRINCIPLE 4:

Rules must be applied consistently, e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.

GENERIC MARKING PRINCIPLE 5:

Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).

GENERIC MARKING PRINCIPLE 6:

Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
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Social Science-Specific Marking Principles


(for point-based marking)

1 Components using point-based marking:

• Point marking is often used to reward knowledge, understanding and application of skills. We
give credit where the candidate’s answer shows relevant knowledge, understanding and
application of skills in answering the question. We do not give credit where the answer shows
confusion.

From this it follows that we:

a DO credit answers which are worded differently from the mark scheme if they clearly convey
the same meaning (unless the mark scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are
correct
c DO credit answers where candidates give more than one correct answer in one
prompt/numbered/scaffolded space where extended writing is required rather than list-type
answers. For example, questions that require n reasons (e.g. State two reasons …).
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check
for evidence it is understood and not used wrongly.)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities
f DO NOT give further credit for what is effectively repetition of a correct point already credited
unless the language itself is being tested. This applies equally to ‘mirror statements’ (i.e.
polluted/not polluted).
g DO NOT require spellings to be correct, unless this is part of the test. However spellings of
syllabus terms must allow for clear and unambiguous separation from other syllabus terms with
which they may be confused (e.g. Corrasion/Corrosion)

2 Presentation of mark scheme:

• Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
• Semi colons (;) bullet points (•) or figures in brackets (1) separate different points.
• Content in the answer column in brackets is for examiner information/context to clarify the
marking but is not required to earn the mark (except Accounting syllabuses where they indicate
negative numbers).

3 Calculation questions:

• The mark scheme will show the steps in the most likely correct method(s), the mark for each
step, the correct answer(s) and the mark for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question
paper and in the mark scheme. In all other instances, the correct answer to a calculation
should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award
equivalent marks for reaching equivalent stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the
‘own figure rule’ applies: full marks will be given if a correct and complete method is used.
Further guidance will be included in the mark scheme where necessary and any exceptions to
this general principle will be noted.

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
PUBLISHED 2022

4 Annotation:

• For point marking, ticks can be used to indicate correct answers and crosses can be used to
indicate wrong answers. There is no direct relationship between ticks and marks. Ticks have no
defined meaning for levels of response marking.
• For levels of response marking, the level awarded should be annotated on the script.
• Other annotations will be used by examiners as agreed during standardisation, and the
meaning will be understood by all examiners who marked that paper.

MARKING SPECIFICS

1 How to deal with crossed out work and multiple answers:


• Where a candidate crosses out an answer and provides an alternative response to that same
question, then mark the work which is not crossed out.
• Where a candidate crosses out an answer and does not make another attempt, you should
attempt to mark the crossed out work and award marks appropriately. This must also be
done even in circumstances where the candidate has gone on to answer an alternative
optional question in Section B.
• For the avoidance of doubt, all of a candidate’s answers, crossed out or not, optional or not,
must be marked. The only work which is not to be marked is something that has been
crossed out and replaced by more work for that same question.
2 There is ‘no response’ (NR) award, as well as a zero marks award. Only award NR if there is
nothing at all written in answer to that question (which is often but not always the case for
optional questions), OR if there is a comment which does not relate in any way to the question
(e.g. ‘can’t do’ or ‘don’t know’ etc.), OR if there is a mark such as a dash or question mark which
isn’t an attempt at the question. You can use the [ # ] or [ / ] key as a shortcut for NR. However, if
there is any attempt at the question which does not score, including copying the question onto the
Answer Booklet, then a mark of 0 must be awarded whether this work is crossed out or not.
3 Always check every page in every response, including additional objects. Every page requires
some form of annotation to show you have seen it.
4 Sometimes a candidate mislabels their answers. They may, for example, have written ‘3(a)’ in the
margin, but the answer given is clearly to question 4(a). In this case, use the mark scheme for
4(a) and award the mark against the mark box for 4(a). Then add a text box comment to the
response and put something like: ‘this is 4(a)’.

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
PUBLISHED 2022

ANNOTATIONS

Any script you mark may be seen or reviewed by your Team Leader, another Team Leader, the
Principal Examiner, Cambridge International staff or the candidate’s Centre. Annotation will make it
clear how you arrived at the mark that you have awarded. The following annotations are used in
marking this paper and should be used by examiners wherever appropriate.
Annotation Use or meaning

L1 Meets description for Level 1 of the Levels of Response.

L2 Meets description for Level 2 of the Levels of Response.

L3 Meets description for Level 3 of the Levels of Response.

L4 Meets description for Level 4 of the Levels of Response.

 Correct and relevant point made in answering the question.

BOD Benefit of the doubt given. The point has not been made quite correctly, completely
or precisely, but is nearly there and the intention is clear.

^ Omission mark. A term, a label, a line on a graph, an example, etc, required to make
the point correctly has been missed out of the response.

× Incorrect point or error made.

? The point being made is unclear or confused.

NAQ Not answering the question.

SEEN This work has been noted by the examiner, but there is nothing of any credit here.

[T] (text A catch-all, when you need to give more detail or explanation, such as a breakdown
box) of marks, or a comment. Please note that teachers who request a script can read
your comments.

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
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ASSESSMENT OBJECTIVES

The skills listed below are what we expect candidates to be able to do. The marks in the mark
scheme reward candidates who demonstrate these skills, so they are helpful to keep in mind if you
have any doubts as to whether or not something is worthy of credit.

AO1 Knowledge and Demonstrate knowledge and understanding.


understanding

AO2 Application Interpret and apply knowledge and understanding to information


presented in written, numerical or graphical form.

AO3 Analysis Analyse economic issues and arguments, using relevant


economic concepts, theories and information, and communicate
conclusions in a clear, reasoned manner.

AO4 Evaluation Critically evaluate economic information, arguments, proposals


and policies, taking into consideration relevant information and
economic principles and distinguishing facts from hypothetical
statements and value judgements.

LEVELS OF RESPONSE MARKING APPROACH

The essay questions in Section B are marked using Levels of Response. They carry a maximum mark
of 25 each. Most of them are split into two parts, where part (a) is worth 12 marks and part (b) is worth
13 marks. However, some essays are set as a single question worth 25 marks.
Try not to 'bunch' marks, but use the whole mark range. Do not reserve (e.g.) high Level 4 marks ‘just
in case’ something turns up of a quality you have not yet seen. If an answer gives clear evidence of
the qualities described in the band descriptors, then it must be rewarded appropriately. If there is any
doubt in your mind, give the benefit of doubt to the candidate.
The difference in grades should be assessed on the ability of the candidate to demonstrate the skills
described in the assessment objectives and not purely on the ability to itemise further facts from the
content of the syllabus. All of the essays test the four assessment objectives above.

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
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LEVELS OF RESPONSE MARKING PROCESS

There are two steps that need to be taken in awarding the mark for the essay questions:
Step 1: Determine the level – start at the highest level and work down until you reach the level that
best describes the answer. Use a ‘best-fit’ approach: which level does it most closely resemble
overall, considering all of the assessment objectives on balance?

Step 2: Determine the mark within the level by considering the following:
• Consistently meets the criteria; clear evidence of the qualities of the level = at the top of the
level
• Meets the level’s criteria but with some slight inconsistency or some parts of the criteria not
addressed = at the middle or above the middle of the level (depending on number of marks
available)
• Just enough achievement for this level on balance = either below the middle or at the middle
of the level (depending on number of marks available)
• Answer is on the borderline of this level and the one below, i.e. it there is only limited
evidence it meets the criteria for this level = at the bottom of level

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
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LEVELS OF RESPONSE MARKING DESCRIPTIONS

Please also see the mark scheme for each part of each essay, detailing the ranges of marks to be
awarded for each Level, and some illustrative content.

Level AO1 AO2 AO3 AO4

L4 detailed knowledge relevant, apposite detailed, precise and critical evaluation of


of relevant facts illustrations and purposeful description, the issues,
and theory specific examples explanation and considering relevant
perceptive are introduced to add analysis using information and
understanding of depth and fullness to appropriate economic economic principles
the specific the answer terms and concepts distinguishes
requirements of the recognises the correctly and fluently. between facts,
question throughout underlying economic draws clear, reasoned hypotheses and/or
the answer concepts and conclusions value judgements
principles and applies a sound, well-structured challenges
these in relevant answer assumptions of the
situations to develop question or model
the answer

L3 adequate some appropriate straightforward, partly complete


knowledge of relevant illustration or satisfactory analysis: evaluation of the
relevant facts and examples seen but generally clear issues in terms of
theory they may be quite statements, supported either relevant
a reasoned general or not very by reasoned arguments information or
understanding of full including some specific economic principles
the question's applies theory and economic terms and attempt to distinguish
requirements facts with accurate concepts between facts,
shown in the reference to the draws some conclusions hypotheses and/or
answer question to develop a functionally organised value judgements
the answer answer attempt to comment
on assumptions

L2 identifies some illustration may not some analysis present some evidence of an
relevant facts be fully relevant and but limited by omissions, ability to evaluate,
and/or theory is superficial or error(s), irrelevant discriminate, or to
the answer overall overgeneralised details or unclear make basic
has a general an accurate communication judgements,
relevance to the application of some conclusions may not be considering some
question, showing related theory or drawn from i relevant information
some fact(s), with little or a disorganised answer
understanding no development

L1 shows some barely relevant, any analysis present is minimal or no


relevant knowledge minimal or tangential likely to have major evidence of the
the answer illustration errors, omissions or be evaluation skills of
indicates that the basic errors of theory mostly irrelevant criticism, judgement
question has not or of fact with or discrimination in
been correctly inadequate the answer
understood development

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9708/42 Cambridge International AS & A Level – Mark Scheme October/November
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Question Answer Marks

1(a) Explain how the discovery and extraction of oil affects the productive 2
capacity of Guyana.

An expansion of productive capacity (1)/Potential growth (1)/Aggregate


Supply increases (1)

Comments on effect on the production possibility curve (PPC)/aggregate


supply (AS) (+1) or
Any link between oil extraction and productive capacity (+1)

1(b) Using the information in the article: 2

(i) Explain the type of unemployment arising from the closure of


sugar plantations in Guyana.

Type of unemployment is structural (1)


Explanation: Cannot compete with foreign sugar producers/change in
pattern of demand (+1)

(ii) Explain how this type of unemployment might be reduced 4

Solution: Supply side policies (1) Example eg Skills/Training (+1).


Up to 2 marks for any developed example
Allow subsidies

1(c) Explain how an over-valuation of the exchange rate may affect 4


Guyana’s economy.

Import prices fall & export prices increase. (1)


Imports increase and exports decrease (1)
Import prices fall and imports increase (1)
Export prices rise and exports decrease (1)
Max 2 marks

Development referring to any one of Balance of payments/


Inflation/Unemployment/Economic Growth/FDI (up to 2 marks

1(d) Discuss with reference to the article, how the establishment of the new 8
fund may benefit the population of Guyana.

Identification of policies of the fund 3 x 1 mark


Development of the impact of 3 policies, up to 2 additional marks for each
policy Max 4 marks

Conclusion (1)

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Question Answer Marks

2(a) Using diagrams, explain with examples the meaning of a positive 12


externality for a consumer and a negative externality for a producer.

Externalities are spillover costs or benefits which do not apply to the


originator of the actions. Positive externalities for a consumer bring a benefit
and social marginal benefit is greater than private marginal benefits.
Negative externalities for a producer bring a cost not paid for by the
producer, Marginal social costs are greater than marginal private costs.
Examples.

L4 (9–12 marks) For an answer which defines positive and negative


externalities and analyses their relationship to social/private costs and
social/private benefits. Appropriate diagrams are shown with reference to them
in the text. Examples are linked to both types of externality.
L3 (7–8 marks) For an answer which defines positive or negative externalities
and analyses their relationship to social/private costs or social/private benefits.
Appropriate diagrams are shown with some limited reference to them in the
text. Examples are provided.
L2 (5–6 marks) For an answer which explains positive and negative
externalities an example of either positive or negative externality is given.
L1 (1–4 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

2(b) Discuss the extent to which positive externalities and negative 13


externalities explain all forms of market failure.

Alternative forms of market failure, e.g. public goods, forms of non-perfect


competition defined in terms of productive and allocative efficiency, forms of
under employment of resources and, equality.

L4 (9–13 marks) For an answer which develops an analysis of two alternative


forms of market failure. A conclusion is reached for 12/13 marks.
L3 (7–8 marks) For an answer which develops an analysis of one alternative
form of market failure and comments on a second form.
L2 (5–6 marks) For an answer which defines and explains alternative form(s)
of market failure.
L1 (1–4 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

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Question Answer Marks

3(a) Explain the law of diminishing returns and its relevance to the shapes 12
of the marginal cost curve and the average variable cost curve of a
firm.

A statement of the law of diminishing returns (LDR) in terms of increased


use of a variable factor of production with a fixed factor of production.
Comment that LDR is a short run phenomenon. The effect of
increasing/decreasing returns on average and marginal output. The
relevance of these to the average variable cost curve.

L4 (9–12 marks) For an answer which refers to the short run, explains and
analyses the implications of the LDR for the shape of the average and
marginal output curves and the marginal cost curve and average variable cost
curve.
L3 (7–8 marks) For an answer which refers to the short run, explains the LDR
and attempts to analyse the shape of the average and marginal output curves
or the marginal cost curve and average variable cost curve.
L2 (5–6 marks) For an answer which explains LDR and average and marginal
costs.
L1 (1–4 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

3(b) Discuss the extent to which a firm’s ability to operate a policy of price 13
discrimination is determined by the market structure in which that firm
operates.

Definition and explanation of price discrimination (PD). Necessary


conditions for PD: able to set price, separate markets and differing PED. PD
and perfect/imperfect market structures

L4 (9–13 marks) For an answer which develops an analysis of the


consequences of the necessary conditions for PD on the price and output of a
firm. Consideration is given to a form of market structure which enables the
conditions of PD to be practiced. A conclusion is reached for 12/13 marks.
L3 (7–8 marks) For an answer which develops an analysis of the
consequences of the necessary conditions for PD on the price and output of a
firm.
L2 (5–6 marks) For an answer which defines and explains PD. Answer may
be largely descriptive with limited if any link market structure.
L1 (1–4 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

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Question Answer Marks

4 Discuss the extent to which marginal revenue product theory can be 25


used to explain the determination of wages. using MRP theory.

Demand for labour (MRP theory MPP x MR (price) of labour, elasticity of


demand and supply of labour and effect on wages. Effects of monopsony and
minimum wage legislation. Questioning of the assumptions of the theory
knowledge of MPP/MR/perfect labour market.

L4 (18–25 marks) For an answer which analyses the theory of wages using
MRP theory. Comments are made regarding the elasticity of demand and
supply of labour. Imperfections in the labour market are identified and linked
to wage levels. The assumptions of the theory of wages are questioned. A
conclusion is reached for 22–25 marks.
L3 (14–17 marks) For an answer which analyses the theory of wages using
MRP theory. Comments are made regarding the elasticity of demand and
supply of labour or imperfections in the labour market are identified and
linked to wage levels.
L2 (10–13 marks) For a limited explanation which uses supply and demand
analysis to determine wages and refers to differing wage levels.
L1 (1–9 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

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Question Answer Marks

5(a) Using Keynesian theory of interest rate determination, explain why 12


interest rates are sometimes very low.

Transaction, precautionary and speculative demands for money, the link


between these and the rate of interest. Significance of speculative demand
and the rate of interest/price of bonds, active/Idle balances, the liquidity trap.
The level of the money supply.

L4 (9–12 marks) For an answer which explains the three demands for money
and analyses their relationship with the money supply, rate of interest and the
liquidity trap.
L3 (7–8 marks) For an answer which explains the three demand for money
with limited reference to the low interest rates.
L2 (5–6 marks) For an answer which explains the transaction and
precautionary demand for money, there may be limited reference to the
speculative demand.
L1 (1 – marks) For an answer which has some basic correct facts but includes
irrelevancies. Errors of theory or omissions of analysis will be substantial.

5(b) Discuss whether in a period of low interest rates, monetary policy 13


alone can resolve the problem of cyclical unemployment.

Monetary policy transmission mechanism and effect on demand in the


economy. Limitations of low interest rates on ability to reduce rate of interest
and provoke expansion. Fiscal policy as an alternative, multiplier effect,
problems of size/timing of interventions.

L4 (9–13 marks) For an answer which develops an analysis of monetary and


fiscal policy and applies them to the problem of cyclical unemployment. Some
limitations of the policy(ies) are explained. A conclusion is reached for 12/13
marks.
L3 (7–8 marks) For an answer which develops an analysis of monetary or
fiscal policy and comments on the other policy, some application to the
problem of cyclical unemployment is made.
L2 (5–6 marks) For an answer which explains monetary or fiscal policy in a
relevant context.
L1 (1–4). For an answer which has some basic correct facts but includes
irrelevancies. Errors of theory or omissions of analysis will be substantial.

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Question Answer Marks

6(a) Explain how changes in the internal value of a country’s currency can 12
affect the external value of that currency.

Definitions of the two terms internal and external value of a currency: inflation
and the exchange rate. The link between changes in the internal value of the
currency and the exchange rate and the exchange rate and the rate of
inflation. Comment on the effect of a fixed/floating exchange rate.

L4 (9–12 marks) For an answer which defines the internal and external values
of a currency: inflation and the exchange rate. It explains the two terms internal
and external value of a currency and analyses the relationship between a
change in one and the effect on the other.
L3 (7–8 marks) For an answer which defines the two terms internal and
external value of a currency, and which explains the relationship between a
change in one and the effect on the other.
L2 (5–6 marks) For an answer which defines and explains the two terms.
L1 (1–4) For an answer which has some basic correct facts but includes
irrelevancies. Errors of theory or omissions of analysis will be substantial.

6(b) Discuss whether a government can achieve all its key macroeconomic 13
aims simultaneously.

Statement of a government’s macroeconomic aims: low unemployment, low


inflation, (The Phillips curve relationship), economic growth and balance of
payments equilibrium. The use of aggregate demand (AD) and aggregate
supply (AS) analysis to demonstrate the effect of under-employed and fully
employed resources in the short run and long run.

L4 (9–13 marks) For an answer which analyses 2 conflicts in simultaneously


achieving the macroeconomic aims of government. AD/AS analysis or an
alternative form of analysis is used to show the effect on the achievement of
these aims. A conclusion is reached for 12/13 marks.
L3 (7–8 marks) For an answer which analyses 1 conflict in simultaneously
achieving the macroeconomic aims of government. AD/AS or an alternative
form of analysis is used to show the effect on the achievement of these aims.
L2 (5–6 marks) For an answer which describes 2 macroeconomic aims of a
government.
L1 (1–4) For an answer which has some basic correct facts but includes
irrelevancies. Errors of theory or omissions of analysis will be substantial.

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Question Answer Marks

7 Discuss the ability of multinational corporations to increase living 25


standards in their home country and the other countries in which they
operate.

Definition of multinational corporation (MNC) and definition of standard of


living (SoL). Analysis of impact of MNC on its host and home countries and
the effects of these on SoL e.g. employment, investment exports/imports,
remittances, transfer of externalities, urbanization, tax yield and
expenditure.,

L4 (18–25 marks) For an answer which defines MNC and SoL and
discusses the impact of a MNC on the SoL of the home and host countries.
A conclusion is reached for 22–25 marks.
L3 (14–17 marks) For an answer which defines MNC and SoL and
discusses the impact of a MNC on the SoL of either the home or host
countries.
L2 (10–13 marks) For a limited explanation of MNC and its impact on the SoL
of a country.
L1 (1–9 marks) For an answer which has some basic correct facts but
includes irrelevancies. Errors of theory or omissions of analysis will be
substantial.

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