REW has received many awards for the appearance and design of its carpets and rugs. All of the wool it uses comes from local suppliers. For this year, REW’s aim is to survive and keep operating. The Managing Director is worried that the country’s Gross Domestic Product has been declining for some time. During the recession, the Managing Director plans to begin selling REW’s products in other countries. Market research shows that demand would be strong.
(a)[2]
What does ‘Gross Domestic Product’ mean?
(b)[2]
Identify two possible effects on businesses caused by falling Gross Domestic Product.
(c)[4]
Identify and explain two reasons why REW’s objectives may alter over time.
(d)[6]
Identify and explain the effect on REW of the changes shown 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 view.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “the overall value of goods and services output in a country” …