12 marks
Define ‘import quota’.
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Business & Globalisation (Cambridge (CIE) IGCSE Business)
Exam Questions
2 hours18 questions22 marks
Define ‘multinational company’.
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32 marks
Define ‘globalisation’.
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42 marks
Define ‘import tariff’.
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52 marks
Identify two benefits for a country hosting an MNC.
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62 marks
Define 'exchange rate'.
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72 marks
State two causes of increased globalisation.
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16 marks
Case Study
YMG is a private limited company. It is the largest manufacturer of soft drinks in country V. YMG produces 1 billion litres a year using flow production. The Managing Director wants YMG to expand. He said: ‘I plan to increase production to 3 billion litres over the next 5 years. This will allow us to start selling our products in new markets in other countries. I know import quotas and lack of local knowledge can cause problems but there are ways we can overcome them.’ The Managing Director also plans to invest $60m in new technology to improve efficiency.
Explain how each of the following problems might affect YMG when entering new markets in other countries.
Problems caused by a lack of local knowledge.
Problems caused by import quotas.
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26 marks
Do you think the introduction of import tariffs is likely to have a greater effect than the introduction of import quotas on an exporting business? Justify your answer.
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36 marks
Do you think multinational companies always benefit the countries they operate in? Justify your answer.
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46 marks
Case Study
VVA is a business based in country X. It manufactures school backpacks (bags). VVA uses retailers as its channel of distribution. The Managing Director knows there are many factors that can affect demand including the stage of the business cycle and how competitive the market is. VVA imports 45% of its raw materials. The Managing Director is worried that the introduction of import tariffs and import quotas, as well as an appreciation in country X’s exchange rate, will affect VVA.
Explain one possible effect of the following changes on VVA when importing raw materials:
Introduction of import quotas in country X.
Appreciation of country X’s exchange rate.
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56 marks
Case Study
WLT manufactures carpets. It exports 40% of its products. Globalisation has created opportunities and threats for WLT. Its method of production allows WLT to use specialisation. All of its 60 employees understand that quality assurance is important. WLT’s directors are considering the best way to increase efficiency.
Explain one opportunity and one threat of globalisation for WLT.
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66 marks
Do you think the benefits to a country of having a multinational company located there are always greater than the drawbacks? Justify your answer.
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112 marks
Consider the following three problems for SSM when entering markets in other countries.
Cultural differences
Lack of knowledge
Import restrictions
Which problem is likely to have the most effect on SSM? Justify your answer.
Refer to the following insert when answering the question
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212 marks
Consider the benefits and drawbacks for country Z if TT builds a factory there. Do you think the government of country Z should allow TT to build this factory? Justify your answer.
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312 marks
Consider the opportunities and threats of globalisation for CC. Which is likely to have the greatest effect on CC? Justify your answer.
Refer to the following insert when answering the question
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412 marks
Consider three possible benefits for PH of becoming a multinational company. Which benefit is likely to be the most important? Justify your answer.
Refer to the following insert when answering the question
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512 marks
Consider how each of the following three changes may affect SSE.
A depreciation in the currency of country Z
An import tariff introduced on sports helmets imported into country Z
Quotas introduced on sports helmets in countries where SSE sells its products
Which change is likely to have the greatest effect on SSE’s profit? Justify your answer.
Refer to the following insert when answering the question
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