During its period of intense export-led industrialisation, Vietnam experienced significant structural shifts in its macroeconomic indicators between 2013 and 2022. Its principal export market is the United States, while its primary import source for manufacturing inputs is China. Vietnam's imports as a percentage of GDP rose from 68% in 2013 to 79% in 2022, reflecting its deep integration into global supply chains. Over the same decade, its GDP per capita increased from 1,900to 1,900 to \,1,900to4,100.
The Vietnamese government implemented several financial reforms to promote consumption-led domestic growth, making consumer credit more accessible and expanding social safety nets, which reduced the necessity for precautionary household savings. Direct personal income tax rates and indirect tax rates were kept constant throughout this ten-year period.
| Year | % change in GDP per capita | Savings ratio (%) |
|---|---|---|
| 2013 | 5.4 | 25.0 |
| 2014 | 6.0 | 24.5 |
| 2015 | 6.7 | 23.0 |
| 2016 | 6.2 | 22.5 |
| 2017 | 6.8 | 21.0 |
| 2018 | 7.1 | 20.5 |
| 2019 | 7.0 | 19.5 |
| 2020 | 2.9 | 22.0 |
| 2021 | 2.6 | 21.5 |
| 2022 | 8.0 | 18.0 |
Using information from the stimulus material, evaluate whether the size of Vietnam's multiplier is likely to have increased between 2013 and 2022.
22 exam-style questions on OCR A Level Economics The multiplier and the accelerator. Each one has a worked solution and a mark scheme showing where the marks go.