Business 0450 · IGCSE · Business and the international economy
Business and the international economy — practice question
BRZ trades in country X by selling outdoor apparel, including waterproof trousers and coats. Most of its stock is brought in from low-wage countries. The Operations Director commented, ‘Globalisation has changed how we do business. It offers many opportunities but I have to consider import quotas and exchange rates’. BRZ aims to behave ethically towards all of its stakeholders. The Operations Director is uncertain whether BRZ can be both ethical and profitable at the same time.
(a)[2]
What is meant by an ‘import quota’?
(b)[2]
What is meant by ‘inventory (stock)’?
(c)[4]
Explain how a depreciation in the value of country X’s currency might affect the profits of BRZ.
(d)[6]
Identify and explain two opportunities globalisation could bring BRZ.
(e)[6]
Do you think companies such as BRZ can be both ethical and profitable? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A quota places a cap on the quantity of goods that may enter a country” …