Latvia is one of the fastest growing economies in Europe. Although its GDP per head is below the European average, it is quickly catching up. Living standards are improving. At the same time, a decrease in borrowing has reduced the chance of high ination. The job market is also improving as the unemployment rate is falling. However, there are concerns that there might be less balance of payments stability. (a) Identify two indicators of living standards. [2] (b) Explain how a decrease in borrowing could reduce the chance of high ination. [4] (c) Analyse how economic growth conicts with balance of payments stability. [6] (d) Discuss whether or not having a lower GDP will be a disadvantage to an economy. [8]