Paper 1 · November 2020 · multinationals and globalisation
A clothing manufacturer opens a factory inside a country that charges heavy import duties on finished garments. It has become a multinational mainly in order to
Aavoid keeping any stock at all
Bget inside a tariff barrier
Cescape company tax in every country
Dshorten its financial year
Explanation
Producing inside the market means the goods are no longer imports, so the tariff and any quota stop applying to them. Firms also go multinational to reach larger markets, to get nearer cheap inputs and to spread risk across economies.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Nov 2020, Q1