OCR A Level Economics: Development, alternative measures and international bodies (H460) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover the development part of “Economic growth and development” in Component 2 (Macroeconomics) of OCR A Level Economics (H460), Version 3.0 (June 2026), for first assessment in 2021. All countries and figures are invented. Learn the content from the study guide and the revision notes. Course pages: the OCR Economics hub and the printable checklist.

Questions

1. State what is meant by sustainable development. [2]

2. Country J’s export price index is 132 and its import price index is 110 (same base year). Find the terms of trade and say what the figure shows for Country J. [3]

3. Country K has a health index of 0.80, an education index of 0.60 and an income index of 0.50.

(a) Calculate its HDI, using the geometric mean. [2] (b) Explain one limitation of the HDI as a measure of development. [2]

4. A donor has GNI of 3,200bn and gives ODA of 16bn.

(a) Calculate ODA as a percentage of GNI. [1] (b) The United Nations target is 0.7% of GNI. Calculate how much more the donor would need to give. [2] (c) Give one reason why ODA may fail to raise development in a recipient. [1]

5. Explain two reasons why economic growth may not lead to economic development. [6]

6. An illustrative Genuine Progress Indicator (GPI) table for Country M (billions of units):

Item	Year 1	Year 2
Consumption	520	560
Inequality adjustment	-60	-72
Household work and volunteering	+70	+71
Environmental costs	-95	-123
Crime costs	-15	-16
GDP	800	856

(a) Calculate GPI in each year. [2] (b) Explain what the data suggests about growth and welfare. [2]

7. In Country N, GDP per head rises from an index of 100 to 190 over 30 years while average life satisfaction (0 to 10) goes from 7.0 to 7.1. In the final year the highest income group scores 7.9 and the lowest 6.1.

(a) Calculate the percentage rise in GDP per head and the change in life satisfaction. [2] (b) Use the data to explain the Easterlin Paradox, and suggest one reason for it. [4]

8. Country L, a WTO member, cuts its tariff on imported textiles from 25% to 10%. The price before tariff is 100 and L’s demand for these imports has a price elasticity of -2.5.

(a) Calculate the percentage change in the consumer price. [2] (b) Find the percentage change in the quantity demanded. [1] (c) Explain how such a tariff cut could help a developing country that exports textiles. [1]

9. Over 20 years, a country’s primary sector share of output falls from 38% to 12% and its tertiary share rises from 40% to 60%. Explain two ways in which this structural change could affect sustainable development. [6]

10. Evaluate whether the HDI is a better measure of development than GDP per head. [9]

11. Evaluate the effectiveness of the IMF, the World Bank and the WTO in promoting growth and development. [10]

12. Explain one way in which the World Bank may promote development in a low-income country. [3]

Answers

1. Progress that meets the needs of people today [1] without closing off the ability of future generations to meet their own [1]. [2] Examiner insight: A definition has two halves: today and later generations. Answers that say only “protecting the environment” leave out the part that distinguishes it from ordinary development.

2. Using (X price index / M price index) x 100: 132 / 110 x 100 [1] = 120 [1]. This is an improvement: each unit of exports buys 20% more imports [1]. [3] Examiner insight: Writing the formula before substituting makes the method clear. Give the direction of change and what it means in goods, not just the number.

3. (a) Product = 0.80 x 0.60 x 0.50 = 0.24 [1]. Cube root = 0.621 [1]. (b) The HDI ignores inequality, so two countries with the same score may spread benefits very differently [1]; it also ignores environmental damage and so says nothing about sustainability [1]. [4] Examiner insight: A limitation should be tied to what the HDI omits and what that changes in the conclusion. “It is not perfect” gains nothing.

4. (a) 16 / 3,200 x 100 = 0.5% [1]. (b) Target = 3,200 x 0.007 = 22.4bn [1]. Extra = 22.4 - 16 = 6.4bn [1]. (c) Aid may be tied to goods from the donor, diverted by corruption or used for low-return projects [1]. [4] Examiner insight: Show the target amount before the difference. A reason for failure is stronger when it says how development is held back.

5. Reason 1: a narrow group may take the gains [1]. Average income rises, but if the poorest receive little, poverty, health and schooling barely change [1]; development is about how widely living standards improve [1]. Reason 2: extra revenue may not be spent on development [1]. If it goes on other uses, health and schooling do not improve [1], so wellbeing lags behind output [1]. Other valid reasons: environmental damage or loss of wellbeing. [6] Examiner insight: Each reason needs a chain: cause, mechanism, effect on development. A list of reasons with one line each tends to stay descriptive.

6. (a) Year 1: 520 - 60 + 70 - 95 - 15 = 420 [1]. Year 2: 560 - 72 + 71 - 123 - 16 = 420 [1]. (b) GDP rose by 7% (856 / 800 - 1) [1] but GPI was unchanged, as higher inequality and environmental costs offset extra consumption, so welfare did not improve [1]. [4] Examiner insight: Compare the two measures using figures from both. Saying that GPI is “better” without using the data does not answer the question.

7. (a) GDP per head: (190 - 100) / 100 = 90% [1]. Satisfaction: +0.1 point [1]. (b) At one time, richer people are happier: top group 7.9 against bottom 6.1, a gap of 1.8 [1], [1] but over time a 90% rise in income left average satisfaction almost unchanged [1]. One reason: people judge income against others (relative income) or adapt to higher living standards [1]. [6] Examiner insight: The paradox is a contrast between two kinds of evidence. Quote one figure from each side.

8. (a) Before: 100 x 1.25 = 125. After: 100 x 1.10 = 110 [1]. Change = 110 / 125 - 1 = -12% [1]. (b) -2.5 x -12% = +30% [1]. (c) Cheaper consumer prices raise demand for its exports, raising export revenue and growth [1]. [4] Examiner insight: Work from consumer prices including the tariff, not the pre-tariff price. Then link the quantity change to the exporter.

9. Way 1: higher productivity and income [1]. Moving workers from farming to services raises output per worker [1], giving more tax revenue to fund health, schooling and cleaner technology [1]. Way 2: effect on resource use [1]. Services tend to use fewer raw materials, lowering pressure on natural capital [1], but a country may import goods whose production damages the environment elsewhere, so the effect depends on how it is measured [1]. [6] Examiner insight: Show that the same change can help in one respect and harm in another. A one-sided “it is good” answer often leaves out the qualification.

10. HDI combines life expectancy, schooling and logged income [1]; GDP per head is average output per person [1]. HDI is broader: health and education capture capabilities that income alone does not [1], and GDP per head hides whether output is used for services [1]. GDP per head is simpler, timely and easily compared [1], and HDI components are strongly linked to income, so the two often rank countries alike [1]. Both ignore inequality and the environment [1]. Judgement: HDI is better for living standards [1], but the choice depends on purpose, and neither shows sustainability, so a wider set, such as GPI, is needed [1]. [9] Examiner insight: A judgement that names the purpose (resources, living standards, sustainability) tends to be more convincing than a general preference.

11. IMF: lends and stabilises economies [1], but conditions on spending can deepen recessions [1]. World Bank: finances long-term projects such as schools and water [1], though loans can add to debt [1]. WTO: sets rules and negotiates lower trade barriers, opening export markets [1]; progress in agreements has been slow and gains uneven [1]. Evidence: judge by growth and poverty outcomes in the countries concerned [1]. The three have different roles, so effectiveness differs [1]. Effectiveness depends on whether benefits reach the poorest [1] and on the time period [1]. [10] Examiner insight: Treat the three bodies separately before judging them. Conclusions that say “it depends” gain from stating what it depends on.

12. It lends or gives grants for a project, such as rural water supply [1]. This raises health and productivity, or lowers business costs [1], leading to higher income and wider development [1]. [3] Examiner insight: Name a specific project and carry the chain through to development, not just to “more investment”.

Where marks are usually lost

• Defining sustainable development without the future generations clause.
• Quoting a formula but not substituting, or substituting with the wrong index.
• Calculating a change using the wrong base, such as using the post-tariff price.
• Confusing a rise in GDP with a rise in welfare.
• Giving limitations of the HDI without saying what they change.
• Giving one-sided views on ODA, trade or international bodies.
• Writing about the three organisations as if they were one body.
• Saying “it depends” without stating on what.

Next steps

• Re-read the study guide and the revision notes.
• Check progress against the printable checklist and the course hub.
• Take one of the free 10-minute diagnostics.
• Book a free trial class: /trial/.

Official syllabus

OCR A Level in Economics (H460), Version 3.0 (June 2026), first assessment 2021, published by OCR. Component 2: Macroeconomics, Area of Study “Economic policy objectives and indicators of macroeconomic performance”, topic “Economic growth and development”.