Suggested Answers of BT2 Revision Package - ASKnLearn

(b) With the help of a diagram, analyze the effects of China’s increasing control over rareearths mines on the Japanese economy.[6m]- Japan manufactures many of the products like wind turbines, solar panels, plasmatelevisions, mobile phones and hybrid car batteries which require rare earths as raw inputs.- is the “world’s biggest importer of these metals” (highly dependent on these raw materialsfrom China)Effects of China’s increasing control over rare earths minesAS effect (show diagram)- Rising COP with increase in prices of rare earth due to cut in China’s exports of rareearth- rare earth is essential rare materials in production of many goods in Japan- decrease in AS (upward shift in AS curve)- decline in real national income à decrease in productionà decrease in employmentas labour is derived demand, especially in the related industries.- Higher GPL as result of decrease in AS à affect export competitiveness of exportsAD effect (show effect on the above diagram)- Outflow of Chinese FDI from Japan (extract 1: “…. Chinese monopoly could shift thehigh-tech manufacturing industry bases from Japan to China”)- Decline in I à decrease in AD- Fall in real national income by more than proportionate via the k effect- Rise in unemployment as domestic workers working in the affected high-techmanufacturing industries lose their jobs given the shift from JapanMarks Scheme:Identification and explanation effect on AD – 2mIdentification and explanation of effect on AS – 2mAccurate diagram with sound explanation – 2mLack depth of explanation – lifting of points without explanation – Max 3mFocus only on AD or AS effect with accurate diagram and sound explanation – Max 3mNo reference to case material – Max 3m