Business 0450 · IGCSE · Business and the international economy
Business and the international economy — practice question
AHP is a multinational company that manufactures mobile (cell) phones in Europe, in country X. 80% of its sales come from Europe. Some people are worried about AHP’s effect on the environment. The Operations Director stated that AHP always aims to comply with all legal controls and that globalisation has brought many opportunities for AHP and its stakeholders. The Operations Director is intending to move its factories to a low-cost country in Asia. Raw materials would have to be transported an extra 4000 kms. Interest rates are expected to rise across Europe.
(a)[2]
What does the term ‘multinational company’ mean?
(b)[2]
Identify two advantages to AHP of being a multinational company.
(c)[4]
Identify and explain two ways in which AHP might affect the environment.
(d)[6]
Identify and explain two ways in which an increase in interest rates could affect AHP.
(e)[6]
Do you think AHP should move its factories to a low-cost country in Asia? 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: “Carries out production or services in more than one country” …