4.3.3 (2)

Question 1

what is the IMF (international monetary fund)?

Answer 1

• surveillance of the global economy
• financial assistance to meber countries facing balance of payment issues

aims to reduce global poverty

Question 2

what is world bank?

Answer 2

international financial institution that provides loans, technical assistance and policy advice to developing countries

Question 3

what are NGOs?

Answer 3

non-governmental organisation
* non for profit voluntary group
* often in small developing countries working on community development and human rights
* eg: Oxfam, Worlds Food program, African Wildlife Foundation

Question 4

what is fairtrade?

Answer 4

ensures that producers in developing countries get:
* fair wages
* safe working conditions
* better rights
* sustainable / greener production

Question 5

what is fairtrade minimum prices?

Answer 5

ensures farmers get a stable, fair price that covers their sustainable production costs—even if market prices drop. This protects them from unpredictable price swings, providing financial security.

Question 6

guranteed minimum price analysis

Answer 6

Fairtrade prices are established through a consultative process involving farmers, producers, and other stakeholders. The minimum price is typically calculated to cover the cost of sustainable production and provide a reasonable livelihood for the farmers and workers.
The minimum price acts as a safety net for producers. Typically, the Fairtrade minimum price is set at 15% of the commercial price
This is especially important for small-scale farmers who may be particularly vulnerable to market fluctuations.
On top of a Fairtrade Minimum Price for most products, the Fairtrade approach includes a Fairtrade Premium – an additional sum of money that farmers and workers invest in projects they choose.

minimum price diagram

Question 7

explain the lewis model of indusralisation

Answer 7

• Surplus Labor in Agriculture: Too many workers on limited farmland leads to low productivity (diminishing returns) and underemployment.
• Urban Pull: Factories offer higher wages (~30% more), attracting rural migrants seeking better-paying jobs.
• Industrial Expansion: Profits from urban manufacturing fuel investment, creating more jobs and speeding up rural-to-urban migration.