Cambridge International as and a level Economics Ebook

1
Explain what is meant by an ‘ageing population’.
2
Explain two possible reasons for the diff erences in 
the trends of China’s and India’s population size 
shown in the table.
Population size in billions
Year
China
India
1970
0.8
0.5
1990
1.0
0.8
2010
1.3
1.1
2030*
1.5
1.3
2050*
1.4
1.5
Table 9.6 
Population growth in China and India
*Predicted figures.
3
Why may increases in incomes reduce birth rates?
4
Discuss whether a larger population would always 
result in food shortages.
237
Chapter 9: The macroeconomy 

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Regulation and equity: 
The issue of income inequality 
raises questions of equity. Deciding whether income is too 
unevenly distributed is a normative issue that takes into 
account the concept of equity.
KEY CONCEPT LINK
Classification according to external trade
In the case of a number of developing economies, 
primary products account for most of the export revenue 
earned. Th
is makes them vulnerable in their trading 
relations because demand and especially supply can 
change signifi cantly. For example, demand may decrease 
due to a health scare and supply may increase due to 
a good harvest. Th
ese changes mean that the market 
for primary products is subject to frequent and large 
fl uctuations in price.
In addition, the demand for many primary products, 
especially food, is income inelastic. Th
is means that 
as world income rises there is little impact upon the 
demand for primary products. In contrast, demand for 
manufactured goods is income elastic. Th
is means that 
primary goods tend to become relatively cheaper than 
manufactured goods. As a result, over time there is a 
tendency for the terms of trade of primary goods to decline 
relative to manufactured goods. Th
is tendency is known 
as the