Pearson Edexcel IGCSE · Business

Business and the international economy: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Business and the international economy.

10 questions25 marksFree, no account

Question 1

1 mark

Which of the following is a possible drawback for a country hosting a multinational company (MNC)?

Question 2

1 mark

A Japanese multinational company wants to convert \(¥5,000,000\) into Euros (\(€\)). If the exchange rate is \(€1 = ¥160\), how much will the company receive in Euros?

Question 3

1 mark

If a multinational corporation moves its headquarters to a country with lower corporate tax rates, this is an example of responding to which type of international influence?

Question 4

1 mark

What is defined as the process by which businesses or other organisations develop international influence or start operating on an international scale?

Question 5

1 mark

A multinational corporation (MNC) decides to relocate its manufacturing plant to a developing country. What is a likely benefit for the MNC?

Question 6

2 marks

What is meant by the term globalisation in a business context?

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Question 7

3 marks

Identify and explain one potential drawback for a developing country when a large multinational corporation (MNC) establishes a factory there.

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Question 8

5 marks

Explain how a significant appreciation of a country's currency is likely to affect the profit margins of its domestic businesses that rely heavily on exporting goods abroad.

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Question 9

5 marks

Part a: Define the term globalisation. (2 points)

Part b: A large multinational corporation (MNC) plans to open a new manufacturing facility in a developing country. Explain two possible benefits to the economy of the country where the MNC chooses to locate. (3 points)

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Question 10

5 marks

An Australian winery exports premium bottles of wine to the United Kingdom. The price of one bottle is set at \(40\) AUD.

Part a: Calculate the price of one bottle in British Pounds (GBP) if the exchange rate is \(1\text{ AUD} = 0.52\text{ GBP}\). (1 point)

Part b: If the Australian Dollar appreciates and the new exchange rate becomes \(1\text{ AUD} = 0.60\text{ GBP}\), calculate the new price in GBP. (1 point)

Part c: Using your calculations, explain how this change in the exchange rate is likely to affect the winery's international competitiveness in the UK market. (3 points)

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