Business and the international economy

A full-mark definition needs TWO ideas: increasing interconnection of economies, and multiple flows (trade, investment, people, information) across borders. "Selling abroad" is just international trade; "becoming a multinational" is a driver of globalisation, not its definition. Describing the outcome ("operates worldwide") instead of the process caps the mark at one.

Trade between countries is only ONE part of globalisation, which also covers investment (FDI), migration of workers, and the spread of technology and information. Treating the two as synonyms loses marks: countries have traded for centuries, whereas globalisation is the modern deepening of that integration across several channels.

The most penalised error is reversing the effect. DEPRECIATION makes exports cheaper for foreign buyers but imports DEARER; appreciation is the reverse. Students think "a weaker currency means everything costs less", but if the pound weakens you need MORE pounds to buy the same dollars, so imports cost more. Check with a quick sum rather than trusting intuition.

Ask: does the measure raise the import's PRICE or cap the QUANTITY? Raising the price is a TARIFF (a border tax that also earns revenue); capping the number is a QUOTA (a legal limit on volume, raising no revenue). Both can cut import volumes, but by different mechanisms. Defining a tariff as "a limit on the quantity of imports" earns zero — that is a quota.

When a question asks about effects on the HOST COUNTRY, write about the country — its workers, government, local firms, and environment (jobs, skills transfer, tax revenue, profit repatriation, competition, pollution). Answers about the MNC's OWN gains, such as cheaper labour costs, are off-target and score nothing here.

Stating that a quota "limits imports" is not enough — trace the chain to the exporter's revenue. A quota imposed by a foreign market caps how many units the exporter may sell there → demand goes unmet → fewer export sales → lower revenue and profit. Marks come from the developed chain, not from simply naming the quota.

Do not assume a tariff hurts every business. A tariff on competing imports raises their prices, so the domestic producer of the same good becomes relatively cheaper and can gain sales — it HELPS that firm. It still harms domestic firms that USE the import as an input (costs rise) and consumers (higher prices). State who gains and who loses.