Business 7115 · O Level · Business and the international economy
Business and the international economy — practice question
AHP is a multinational company. It manufactures mobile (cell) phones in Europe in country X. 80% of its sales are in Europe. Some people are worried about AHP’s effect on the environment. The Operations Director stated: ‘AHP always aims to make sure it complies with all legal controls. Globalisation has opened up many opportunities for AHP and its stakeholders. The Operations Director is planning to move its factories to a low-cost country in Asia. Raw materials would have to be carried an extra 4000 kms. Interest rates are likely 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 have an impact on the environment.
(d)[6]
Identify and explain two ways in which an increase in interest rates might affect AHP.
(e)[6]
Do you think AHP should relocate 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: “Factories, production or service operations in more than one country” …