Page 344 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 6 External influences on business activity
2 a Pressure groups are currently posing a threat to
multinationals in Country Z. When considering
which country to set up operations in, identify
and explain why Halo Enterprises should
consider pressure groups as both an opportunity
and a threat.
Opportunity:
Explanation:
Threat:
Explanation:
[8]
b The exchange rate of Country X’s currency
with respect to Country Y’s currency has
been fl uctuating in the past one year. If Halo
Enterprises decides to export to Country Y, explain
whether appreciation or depreciation of Country
X’s currency with respect to Country Y’s will be
benefi cial to Halo Enterprises. Justify your answer.
342
Effect of appreciation of country X’s currency:
Effect on depreciation of country X’s currency:
Conclusion:
[12]
3 a Based on the information in Appendix 2,
compare two economic features of Country Y and
Country Z and explain their impact on business
activity.
Feature 1:
Impact on business activity:
Feature 2:
Impact on business activity:
[8]
b Before Halo Enterprises can set up operations
in either of the countries, they need to put
forward a proposal to the government showing
the social costs and benefi ts of their operations.
The government of Country Z is aware of the
increasing threat of pressure groups and wants
to do a very detailed cost-benefi t analysis of
Halo Enterprises’ proposal before giving it
approval. Identify and explain two positive
and two negative externalities that Halo
Enterprises may cause. Should the government
of Country Z approve Halo Enterprises’
proposal? Justify your answer.
Positive externalities:
Negative externalities:
Conclusion:
[12]
4 a What are tariffs and quotas? Explain how they
may impact the business activity of Halo
Enterprises if it decides to export to or set up
operations in Country Y.
Tariffs:
Impact on Halo Enterprises:
Quotas:
Impact on Halo Enterprises:
[8]
b Halo Enterprises is dedicated to offering the
best ethical, natural and eco-certifi ed beauty
products while trying to minimise its impact on
the environment and being sustainable. Why do
you think it is important for Halo Enterprises to
be ethical, follow environmentally friendly business
practices and be sustainable? Justify your answer.
Importance of being ethical:
Importance of being environmentally friendly:
Importance of being sustainable:
[12]
Total available marks 80