11.5 Relationship between countries at different levels of development

Consider the extent to which aid and trade can contribute to a country\'s economic development.

Assess the impact of international aid on the standard of living in low-income countries. [20]

Discuss the ability of multinational corporations to increase living standards in their home country and the other countries in which they operate. [25]

'In developing economies an increase in GDP determines an increase in the standard of living. Foreign direct investment (FDI) will produce an increase in GDP therefore governments in developing economies should encourage FDI.' How far do you agree with this statement? [25]

The International Monetary Fund (IMF) lends money to developing countries but requires that these countries reduce existing restrictions on imports, focus on the export of primary goods and accept a devaluation of their currencies.

Based upon the above, assess whether developing countries should continue to borrow money from the IMF. [25]