CIE IGCSE Topical Past Paper 1

6.3 Business and the international economy

045/12/M/J/2024

DLT manufactures cups and plates in country X. Its factory uses flow production and has 75 employees. The Human Resources Director is aware that there are many legal controls over employment. DLT exports 30% of its products to country Y where it benefits from lower rates of taxation and no import quotas. DLT’s Managing Director is considering relocating its factory to another part of country X to meet the increased demand for its exports.

(a) Define ‘import quota’.[2]

045/12/M/J/2024

IDT manufactures clothes for the mass market. It is a multinational company with factories in 4 countries. IDT has short-term and long-term financial needs. The Finance Director is analysing IDT’s statement of financial position. An extract is shown in Table 3.1. He has been asked to calculate working capital and to explain how an increase in non-current liabilities might affect IDT.

Extract from IDT’s statement of financial position ($ million)
	2022	2023
Current assets	380	420
Current liabilities	250	280
Non-current liabilities	300	400

Table 3.1

(e) Explain two advantages to a business of being a multinational company. Which advantage do you think is likely to be the most important? Justify your answer. [6]