REW has received many awards for the design and style of its carpets and rugs. The wool it uses all comes from local suppliers. REW's objective for this year is to survive and stay in business. The Managing Director is worried that the country's Gross Domestic Product has been falling for some time. During the recession, the Managing Director plans to begin selling REW's products in other countries. Market research indicates that demand would be high.
(a)[2]
What does 'Gross Domestic Product' mean?
(b)[2]
Identify two possible effects that falling Gross Domestic Product can have on businesses.
(c)[4]
Identify and explain two reasons why REW's objectives could change over time.
(d)[6]
Identify and explain the effect on REW of the changes in the following ratios: change in acid test ratio; change in profit margin.
(e)[6]
Do you think REW should begin selling its products in other countries? 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: “The value of all output of goods and services produced in a country in one year or at a given point in time” …