Answers to exam-style questions

Please note that these are not the only possible answers. Most CSEC Principles of Business examination questions can be
answered in many ways, using a variety of different examples.

1. The nature of business the globe. They specialize in related

1. a Two advantages of doing business as a sole activities, for example energy production
trader are:- orbanking.
(Choose any two) Conglomerates are large companies which
zz Easy to establish and manage. own a variety of businesses producing
zz Decision-making is speedy, since sole different goods or services.
traders own and operate their own
c Multinational corporations:- Bank of Nova
businesses.
Scotia; British Petroleum (BP); Alcoa
zz Customers receive special attention.
zz Profits are not shared. Conglomerates:- Neal and Massy Ltd.; Ansa
Two disadvantages of doing business as a McCall; Grace Kennedy Ltd.
sole trader are:- d Two benefits of a franchise for an individual
(Choose any two) starting a business are:-
zz Unlimited liability, that is, all losses and zz the entrepreneur enjoys the goodwill
debts incurred by the business must be associated with the franchise and can use
borne by the owner. an international brand name.
zz Problems in raising capital. zz there are fewer risks involved than in
zz Limited managerial skills. starting a new business (e.g. in
zz Lack of competitiveness. (Discounts, if developing markets for products etc.).
offered to the sole trader may be small
in comparison to big business Two disadvantages of a franchise for an
operations). individual starting a business are:-
zz Lack of continuity, if the owner dies, the zz the entrepreneurial spirit is restricted as
business also dies. the business must follow the regulations
zz Long working hours. of the franchisor
zz the entrepreneur has to pay a portion of
b Multinational corporations are giant
the profits in the form of royalties to the
international firms, which operate from their
franchisor.
corporate headquarters in their home
countries, but conduct their business e Two differences between a private limited
activities through their subsidiaries across company and a public limited company are:-

Areas of difference Private limited company Public limited company

Accounts Accounts may be kept Reports and financial
confidential. information must be made
public.
Raising Capital Private companies cannot issue They can raise large amounts
shares to raise capital for the of capital through the issue of
business. shares to the public.

2. a The four different types of economic zz Planned or command economy

systems are:- zz Mixed economy.
zz Subsistence economy
zz Market or capitalist economy
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 Answers to exam-style questions

b Two differences between any two economic

systems listed in (a) above are:-
(Choose any two systems and compare)

Areas of Subsistence Market Planned Mixed Economy

differences Economy Economy Economy
Ownership of Individual and Private The state or Both government and private
the factors of family individuals government individuals and firms. (Private
production and firms Sector)
Who decides what, Individual and Consumers The state or Government provides essential
how much and for family choices and government services (hospitals, education,
whom to produce? demand infrastructure, etc.) and the
(areas & levels of private sector provides goods
production) and other services.
Government No government Little or no Total Government involvement
participation or involvement. government government only in certain areas of
involvement involvement. involvement in national importance, (national
all areas. security, hospitals, education,
infrastructure, etc)

c Three areas of differences between the

private and public sectors are:-

Areas of difference Private Sector Public Sector

Ownership & control It is that part of the economy
that is owned and controlled by
private individuals and firms.
Motive of operation Its primary motive for being in
business is making profits.
Sources of funding Loans from local financial
(capital) institutions.
Personal savings.
Loans from family members.
Sale of shares to the public.
It is the operations in the economy that
are undertaken by the government for
the benefit of its citizens, and all central
and local government activities which are
funded by the public.
Its primary motive is to provide essential
services to the citizens of the country; the
making of profits is secondary.
Taxation.
Loans from local and/or international
financial institutions.
Sale of Treasury Bills and Government
bonds and securities.
Sale or divestment of public assets.

d Two groups of people who may form a e One purpose for which a co-operative might
co-operative are:- be formed for each of the two groups in (d)
(Choose any two) above are:-
zz Producers zz Producers to ensure that the best price
zz Consumers is obtained for their products.
zz Savers.

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 Answers to exam-style questions
zz Consumers to obtain goods at higher
quality and lower prices.
zz Savers to encourage savings and to
obtain low-interest loans, etc.
3. a Barter is the exchange of goods/services
without the use of money.
b Two problems associated with the barter
system are:-
(Choose any two)
zz Double coincidence of wants (each
person has to have what the other wants).
zz Rate of exchange (deciding how much of
one good is exchanged for another).
zz Store of value (can't save goods for use
at a future date without spoiling).
zz Divisibility (some goods can't be split into
smaller parts without losing its value).
c The four functions of money are:-
zz Medium of exchange.
zz Standard for deferred payments.
zz Measure of value.
zz Store of value.
d Three advantages of making payments
withmoney rather than through the
barter system are:-
zz there is no longer a need for a double
coincidence of wants to take place. Money
is widely accepted for any transaction.
zz Money is divisible, and can be used for
both large and small payments
zz money is portable, and can be used to
make payments at any distance.
e Two ways in which payments may be made
using money, other than the use of notes and
coins are:-
zz by the use of cheques which are not legal
tender but an order to the banker to
make the payment to the bearer.
zz by the use of debit cards which is a
non-cash transaction at the point of sale.
The merchant will receive his/her money
from the bank.
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4. a A shareholder is a person who is part owner
of a business through the purchase of shares.
b Two ways in which a shareholder may
benefit from a successful business are:-
zz the shareholder can receive dividends on
his shares
zz the shareholder can expand his equity,
that is, the value of his shareholdings.
c Three functions of a business are:-
(Choose any three functions)
zz to create employment and incomes for
people in the society.
zz to maintain and expand its market and
the economy.
zz to compete by producing goods and/or
services to satisfy the needs and wants of
the population.
zz to maintain its social status as a
corporate citizen by assisting the
community in which it operates.
zz to satisfy the need or desire for making
more money by maximizing profits.
zz to take on the risks associated with
running a business.
d A stakeholder is any person, group of people,
or organisation that has an interest in the
business.
e Three groups of stakeholders, and one way
in which each may benefit from the
successful operation of a business are:-
zz Owners, from the receipt of profits.
zz Employees, from improved wages and
working conditions.
zz Customers, from quality products and
reasonable prices.
zz Society, from the funding of community
groups and activities.
zz Government, from taxes, both direct and
indirect.
5. a An entrepreneur is a person who undertakes
the risks involved in establishing and
running a new business.
 Answers to exam-style questions
b Two reasons why James may be interested in
starting his own business are:-
(Choose any two)
zz Desire for financial independence, and
to earn their own money and be
financially secure.
zz Self-fulfilment. He may want to be
successful and to determine that
success.
zz Self-actualisation. It may have always
been a dream or goal to own and
operate his own business.
zz To improve his status in life, by
improving his income, and their
economic standing in society.
c Two advantages and one disadvantage for
James if he starts his business on the
Islandof St Anne as against the island of
StGeorge
Advantages:-
zz Manufacturers are free to produce what
the consumers require, and the
consumers in turn are free to spend their
money as they see fit.
zz Decision-making is not controlled, so
there is greater participation in the
decision on what is to be produced to
satisfy the needs of the consumer.
Disadvantage:-
zz Businesses could be exploited through
the imposition of high prices for
utilities and materials if there is
insufficient competition among
producers or government regulation of
business.
d Two functions of a business owner when
starting operations are:-
(Choose any two)
zz planning in order to achieve the goals
and objectives of the business
zz sourcing finance for the day to day
operations of the business
zz hiring staff to operate the various areas
of the business
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e Two roles that James would have to perform
with respect to any employees hired by his
organization are:-
(Choose any two)
zz Pay workers a fair and reasonable wage
zz Provide safe and proper working
conditions
zz Train workers to perform their tasks
effectively and efficiently
zz Promote workers based on merit
2. Organization and management
1. a The four main functional departments of a
typical business are:-
zz Production
zz Marketing and Sales
zz Finance and Accounting
zz Personnel or Human Resource
Management.
b Two responsibilities which would be
assigned to each of the departments listed
above are as follows:-
Production
sourcing of raw materials
manufacturing of the products.
Marketing and Sales
promoting the products (e.g. advertising,
sales promotion, etc)
selling the products to customers.
Accounting and Finance
making and receiving payments on
behalf of the company
preparing the financial statements of the
company.
Personnel or Human Resource Management
recruiting, disciplining or dismissing staff
training, promoting or redeploying staff.
c One way in which an increased demand will
affect each of the major departments of a
sports goods manufacturing company is:-
Production department will have to source
more materials to manufacture more
equipment.
 Answers to exam-style questions
Marketing and Sales departments will have
to distribute and sell more items.
Accounting and Finance department will
have to release more funds to purchase the
materials needed to manufacture the
additional equipment, as well as pay
overtime or new staff.
Personnel or Human Resource Management
department will have to hire workers to meet
the production demands.
2. a Management is the bringing together of
allthe resources (human and non-human)
in an effort to meet the goals of an
organization.
b Four functions of management are:-
(choose any four)
zz Planning is the process by which a
manager prepares for the future.
zz Organizing is the process of pulling
together all resources needed, to meet
the goals of the organization.
zz Controlling is the process of checking
and measuring how activities are being
carried out in the business and steering
them towards meeting the goals set by
the organization.
zz Delegating involves assigning tasks or
goals to subordinates whilst at the same
time granting them the necessary
authority to carry out the tasks.
zz Staffing is the process of selecting,
orienting, assigning, training,
promoting, and retiring the labour force
Marketing
manager
Reporting relationship
Lateral relationship
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as well as matching the right personnel
with the right job.
zz Communicating is the process of
transmitting information and ideas to
people within the various levels of the
organization.
zz Directing/Coordinating is the process
by which actual performance is guided
towards the goals to be met.
zz Evaluating is the process of assessing
work performance to determine how
well the tasks have been done, and what
steps are to be taken to improve future
performance.
zz Motivating is the process by which
workers are encouraged or influenced to
take the right action to get the tasks and
jobs done.
c Two responsibilities of management to the
employees of a business are:-
(Choose any two)
zz to provide fair wages
zz to provide safe working conditions and
equipment
zz protection against unfair dismissal
zz providing opportunities for promotion
and growth within the organization
zz to provide compensation for job-related
injuries
zz to provide proper training and education.
d i Lateral relationships exist among people
who are at the same level within an
organisational structure.
Managing
Director
Production Personnel or Human
manager Resources manager
 Answers to exam-style questions

ii Line management represents lines of manager gives orders or instructions to

commands or authority; it is a vertical subordinates, who may pass these
relationship in which the line director/ further down the line.

Managing
Director

Financial
manager

Chief
accountant

Accounts
Receivable manager

Accounts
clerks

iii Span of control is the number of the effective limit to the number of staff
subordinates a manager supervises, or that a manager can supervise efficiently.

M. D.

3. a Motivation is the process by which workers d One purpose for which a business may
are encouraged or influenced to take the right establish a committee:-
action to get the tasks and jobs done. zz to advise the executive and to assist it in
developing policies and procedures for
b Maslows hierarchy of needs are:-
scheduling staff vacations.
zz Physiological or basic needs
zz Safety and security needs Two members likely to be appointed to this
zz Social and belonging needs committee are
zz Esteem needs zz Chairperson
zz Self-actualization needs. zz Secretary
c Theory X assumes that most workers dont e i The usual role of the chairman or
like work and prefer to be directed, do not chairwoman is to convene and to
like responsibility and focus more on safety coordinate the proceedings of the
than anything else. meeting.
Theory Y assumes that the workers like work ii The usual role of the secretary is to
and are willing and capable of making a record the minutes of the meeting and
positive contribution to the organization. provide members with copies.

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 Answers to exam-style questions

iii The minutes are a summary of what use their initiative to complete the tasks
took place in the meeting, decisions, required.
issues for further discussion, etc. Disadvantage:-
4. a Four different leadership styles are:- zz Employees could be given too much
freedom, to the extent that they begin
zz Authoritarian
operating outside of the goals of the
zz Democratic
organisation.
zz Charismatic
zz Laissez Faire. c One benefit of teamwork and one difficulty
associated with teamwork are:-
b One advantage and one disadvantage of any
(Choose any one)
two styles from (a) above are:-
(Choose any two styles) Benefit:-
Authoritarian zz creative problem-solving from the
Advantage:- inputs of individuals of the team.
zz Quick decision making which might be zz the pooling of resources, ideas and
essential in a crisis. expertise.
zz motivation of the workers personally
Disadvantage:- and collectively.
zz No participation from employees in zz increases the level of productivity.
decision-making zz improvement in the quality of work.
zz fostering a participative approach to
Democratic
work, giving a feeling of belonging and
Advantage:-
making a significant contribution to the
zz Participation by employees in decision-
organization.
making can lead to more effective
zz providing for continuity in the carrying
decisions as employee experience can be
out of projects if a member leaves.
useful for managers.
zz increase in the efficiency and
Disadvantage:-
effectiveness of the negotiation process.
zz Time must be devoted to involving staff
and this can slow down decision-making. Difficulty:-
This can be a problem when a quick (Choose any one)
decision is essential. zz incompatibility of the team members
may lead to rivalry within the team.
Charismatic
zz there may be too much rivalry between
Advantage:-
teams.
zz The charismatic leader inspires zz a team member who is not interested in
employees with personal magnetism and the particular task may weaken the
communication skills and this is a overall effort.
motivating factor.
Disadvantage:- d Four channels of communication which may
be used in a business context are:-
zz A charismatic leaders decisions may be
(Choose any four)
accepted uncritically. Unwise or
unscrupulous leadership may bring zz consultation
disaster to a business. zz suggestion box
zz meetings (formal or informal)
Laissez Faire zz reports
Advantage:- zz memorandum (a memo)
zz Gives employees a sense of zz telephone
empowerment, as they are allowed to zz electronic mail (e-mail)
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 Answers to exam-style questions

zz letters c Two types of Management Information

zz newsletters System are:-
zz interviews (Choose any two)
zz manuals zz Transaction processing system (TPS)
zz notice boards zz Decision-making support system (DSS)
zz speeches zz Office automation system (OAS)
zz courses and seminars zz Executive support system (ESS)
zz intercoms.
d Two ways in which one type of Management
e One purpose for which each in (d) above Information System may be used, and two
would be suitable is:- requirements for effective operation are:-
(Choose any four) (Choose any one)
zz consultation (to have discussions zz Transaction Processing System (TPS)
between management and staff on it can be used to handle point-of-
particular issues) sale transactions
zz suggestion box (to get feedback from it is used by the automatic teller
workers to improve procedures) machines
zz meetings (formal or informal) (to discuss it requires quick systems response
issues affecting the organization) it requires the system to be reliable.
zz memorandum (to inform staff about
zz Decision Support System (DSS)
decisions and issues)
it is used to enhance decision-
zz telephone (to contact anyone within or
making, for example on production
outside the organization, usually for
volume or staff recruitment.
informal communication)
it is used to collect and organize
zz electronic mail (e-mail) (to transmit or
information in a less structured
receive information rapidly)
environment
zz interviews (to select the appropriate
it requires adaptability to deal with
candidate for a position within the
new requirements
organization)
it requires the ability to use many
zz manuals (to provide instructions for
different types of information.
particular tasks or jobs)
zz Office Automated System (OAS)
zz intercoms (to contact a specific person
it may be used for internal e-mails
or groups of people).
it may also be used for
5. a Management Information System is the teleconferencing
development and use of effective information it requires flexible, adaptable and
systems in organizations to support monitoring stable technology
and decision-making by management. it requires a local or wide area
network system to facilitate its
b Two advantages of a Management
operations.
Information System over a paper-based
management system are:- zz Executive Support System (ESS)
it is used to support management
zz data can be retrieved and processed in a
decision-making
much shorter time.
it is used to obtain high-level,
zz Less space is needed for storage than a
aggregated and standardised
paper-based system.
information from many sources

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 Answers to exam-style questions
it must be flexible for use in many
different situations
it must be easy to operate for
executives with no specific computer
training.
e Two challenges likely to arise in the
introduction or operation of a Management
Information System are:-
(Choose any two)
zz the cost of setting up and maintaining
the system (establishment, maintenance
and security)
zz the cost of training workers to operate
the system
zz the possibility of human error in the
input of data.
6. a A leader is one who is able to employ the most
appropriate strategies for getting work done in
order to meet the goals of the organization.
b Abigails former leadership style was laissez
faire, because she always allowed people to
choose when, and how, they wanted to get
the job done as long as it was completed
within the timelines set.
c Two advantages and two disadvantages of
Abigails former leadership style are:-
Advantages:-
zz it gives employees a sense of
empowerment, as they are allowed to
use their initiative to complete the tasks
required
zz the employees self-esteem is developed
and they feel more involved.
Disadvantages:-
zz employees could be given too much
freedom, and might become lazy and
ineffective
zz they could begin operating outside of
the goals of the organisation.
d i The new structure will affect the span of
control for senior managers to the extent
that they will have more subordinates to
supervise.
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ii One benefit the organization hopes to
derive from introducing the flat
organizational structure is to speed up
the flow of communication and
information as there will be fewer levels
to go through.
e Two forms of industrial actions that are
available to the employees if differences
cannot be resolved are:-
(Choose any two)
zz Go slow, that is taking a longer time
than normal to perform a task
zz Work to rule, that is the workers will
only do a certain amount of work and
nothing more
zz Sick out, that is staying at home and
pretending to be sick
zz Striking, that is withholding their labour
entirely and walking off the job.
3. Establishing a business
1. a i Enterprise is one of the factors of
production which organises the other
factors of production (land, labour and
capital) to produce goods and services
and make a profit (or loss).
ii An entrepreneur is a person who
undertakes the risks involved in
establishing and running a new business.
b Four qualities of a successful entrepreneur are:-
zz Creativity. The entrepreneur must be
able to take the step of setting up a new
business.
zz Determination. The entrepreneur must
be firm in his goal and objectives for the
business to ensure that they are met.
zz Flexibility. The entrepreneur must be
will to adjust strategies as circumstances
changes within the business environment.
zz Willing to take risk. The entrepreneur
must be willing to take the risks involved
in starting any new business, and be
aware of all the pitfalls or obstacles that
may be involved.
 Answers to exam-style questions
c Two reasons why someone may decide to
establish their own business are:-
zz Desire for financial independence, and
to earn money and be financially secure.
zz Self-fulfilment. The desire to be
successful and to determine that success.
d Four sources from which an entrepreneur
may obtain capital to start a business are:-
zz your own money (personal savings)
zz loans from family or friends
zz loans from financial institutions (Banks,
Credit Unions, etc.)
zz Loans or grants from government
institutions (e.g. the National Enterprise
Development Company in Trinidad and
Tobago)
2. a A business plan is an explanation of who will
be responsible for a new business, what the
business is intended to do, how it is going to
get the money and other resources to do it,
and what profit it hopes to make.
b Two ways in which a business plan helps
entrepreneurs are:-
(Choose any two)
zz Providing a blueprint for the operations
of the business
zz Identifying the likely income and
expenditure
zz Giving the entrepreneur a baseline to
monitor progress of the business
zz Providing a guide to the goals of the
business and future financial flows for
those financing the firm
zz Enabling professional advisers to
monitor the progress of the business.
c Two types of data which may be used in the
preparation of a business plan are:-
(choose any two)
zz market data on who the intended
customers are, customer needs,
competition, size of market, etc., and
proposed marketing strategy
zz financial data on how the business will
be financed, profit and loss forecasts,
cash flow forecast, capital expenditure
requirements
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zz management data on the ways in which
the business is expected to grow,
recording procedures, and methods for
monitoring progress.
d One topic which should be covered by a
business plan under each of the following
headings is:-
iFinance
(Choose one of these)
zzCapital requirements to start the
business (e.g. plant, machinery,
stocks) and operate the business for
the first six months.
zz Sources of capital, that is, where the
entrepreneur can obtain funding to
start the business.
ii Legal aspects
zz Whether the business will be
organised as a sole trader, a
partnership, a company or another
form of organization.
e i Contingency plan. This is an plan to
deal with an event outside the control of
the business, such as a natural disaster.
ii Long-term plan. This is outlines
strategies for change over a period of at
least three years, and usually longer.
iii Project plan. This is planning for a
specific project or task; it is time specific
to the respective project.
3. a Three steps that John must take before
starting his own business are:-
zz to find a proper location to operate the
business
zz to register the name of the business with
the Registrar of Companies
zz to register the business with the
Revenue Authority for taxes.
b Two regulations affecting Johns Burger
Palace which would be applied by each of
the following are:-
i Local government
zz food handlers licences (food badge)
for himself and any employees
zz building regulations for his business
premises.
 Answers to exam-style questions
ii National government
zz registration with the Revenue
Authority for the payment of taxes
zz registering all employees with the
National Insurance Board for the
payment of NIS
c i The risk faced by the bank if there is no
collateral is that it will lose its money if
the borrower fails to pay.
ii The benefit that a bank may get from
the use of collateral is that it can recover
the money loaned to a borrower by
selling the collateral if he fails to repay
the loan.
iii Two possible sources of collateral are:-
(Choose any two)
zz Government tax-free savings bonds.
zz Stocks and shares.
zz Fixed deposit certificate.
zz A loan guarantee from a third party.
zz Land titles or deeds of property.
zz Life assurance policies (cash value).
d Two ethical issues that John must be mindful
of if he is to start a new business are:-
(Choose any two)
zz the danger of selling substandard goods
due to the use of poor quality
ingredients
zz improper or misleading advertising
zz he has to pay all taxes and NIS
contributions to the relevant authorities
zz he must properly dispose of all garbage
and waste to avoid polluting the
environment.
4. Business and the law
1. a A contract is an agreement between two or
more parties that is legally binding or
enforceable by law.
b The three essential features of a valid simple
contract are:-
zz offer
zz acceptance
zz consideration.
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c Three ways in which a contract may be
terminated or discharged are:-
(Choose any three)
zz by breach, that is when one party to a
contract fails to carry out their side of
the agreement
zz by performance, that is when both
parties carry out their side of the
contract.
zz by agreement, that is when both parties
agree to cancel the contract before it is
completed
zz by death, that is one party might die and
cause termination. However, in some
cases, that partys agent or beneficiaries
may be liable to continue the terms of
the contract.
d Two remedies for a breach of contract are:-
(Choose any two)
zz financial compensation, or
compensatory damages.
zz specific performance for example where
the vendor is ordered to complete a sale
of land.
zz declaratory relief, in which the courts
state each partys rights and obligations.
2. a An invitation to treat is an expression of
intent to negotiate or an invitation to make
an offer.
A social agreement is a bare promise that is
not enforceable by law.
b Three differences between a simple contract
and a specialty contract are:-
A simple contract
can be either oral or implied. It need not
be in writing
does not always need to be signed
does not usually need to be witnessed.
A specialty contract
is a formal agreement that must be done
in writing
must always be signed by all parties
agreeing to it
in most countries, a deed or specialty
contract must be witnessed.
 Answers to exam-style questions
c Three types of specialty contracts and their
purposes are:-
zz Sale of land (deed of conveyance)
zz Deed of gift, transferring land or
property by gift
zz Deed of partnership, setting out the
rights and duties of each partner.
d The difference between a void contract,
avoidable contract and an unenforceable
contract are:-
zz Void contract. These are contracts that
never came into existence, for example
an agreement to break the law.
zz Voidable contracts. These are contracts
which may be overturned by legal
action, for example because they were
based on misrepresentation of an
important fact, or because one of the
parties was under duress.
zz Unenforceable contract or transaction is
one that is in conflict with the legal
rights of one party, for example a
contract for the sale of goods which
states no refund, no return.
3 a T
 he difference between insurance and
assurance is:-
zz Insurance is about uncertainty, for
example insurance against loss by fire.
zz Assurance is about certainty, as in life
assurance.
b Two benefits which may be provided by
assurance are:-
zz to provide for a payment after death to
the beneficiaries (whole life policy)
zz to provide for a payment of a basic sum
at a certain age or on the death of the
insured, whichever comes first
(endowment policy).
c The pooling of risk is where a risk is defined
as a loss that may or may not occur, and the
insurance company undertakes to bear the
risks of many insured persons in return for
the premium they pay the company. When a
person makes a claim for a loss arising from
an insured risk, the insurance company
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compensates the person from the premiums
it has received from its clients.
d Four principles of insurance are:-
(Choose any four)
zz Utmost good faith (the parties must be
truthful in their declaration and must
disclose all relevant facts)
zz Insurable interest (the insured must be
the one that would suffer financially if
an event occurred)
zz Proximate cause (the damage that is
incurred is caused by the risk insured
against)
zz Indemnity (the policy holder is
compensated for the actual loss
incurred)
zz Contribution (if the same risk is insured
with several insurance companies, each
insurer will contribute a percentage
towards payment of the claim).
e Two forms of insurance which are
appropriate for businesses, but not for
mostindividuals or households are:-
zz liability insurance protects businesses
against liability as a result of losses or
injury incurred by people on the
property
zz cargo insurance protects exporters and
shippers against the hazards of the sea,
or damage or loss of cargo.
4. a The purposes of the following documents are:-
i A bill of lading is for goods transported
by ship. It acts as a receipt for the goods,
summarizes the shipping contract and
transfers ownership to the consignee.
ii A bill of exchange is a document often
used in international trade a which
promises payment of a particular sum on
a later date.
iii A credit note is sent by the supplier, to
the customer, (for example when there is
an error in the invoice or when goods
are returned to the supplier due to
damage) and the customers account is to
be decreased.
 Answers to exam-style questions

iv An invoice is a document that lists the interest is charged on unpaid

goods purchased and informs the
purchaser of the amount owed to the
supplier. It also states the terms of
purchase and payments.
v A statement of account is a document
that summaries all the transactions of a
customer; debits and credits for the
previous month and shows any amount
due for payment.
amounts or balances after the end
ofthe monthly billing period.
zz Debit card
it is directly linked to the holders
personal bank account
no interest is charged by the bank
asthe payments are automatically
deducted from the holders account
at the time of sale.

b Three instruments of payment that can be 5. Production

used for international trade are:-
1. a The four factors of production are:-
(Choose any three)
zz Land
zz Telegraphic Money Order (wire transfer).
zz Labour
It is a quick way of making payments or
zz Capital
transferring sums of money to persons in
zz Enterprise.
local or overseas locations. It is part of the
electronic banking system. b i Four natural resources that are found in
zz Bill of exchange. the Caribbean are:-
It is an unconditional order in writing zz bauxite
from the purchaser, addressed to his zz oil
banker giving instructions to make zz beaches
payment on demand or at a fixed or zz gold.
determinable future time, a certain sum
ii One country in which the resources
of money to a specific person (supplier)
stated in (b)(i) above can be found:-
or to a bearer.
zz Documentary credit. zz Bauxite can be found in Jamaica
It is a facility for paying debts arising zz Oil can be found in Trinidad and
from international trade. It allows the Tobago
exporter to receive immediate payment zz Beaches can be found in The Bahamas
from the importers bank as long as zz Gold can be found in Guyana.
documentary evidence of the transaction iii One way in which a business could make
such as a bill of lading is presented. use of the resource listed above for
zz Bank draft. production is:-
It can be used when payments for goods (Choose any one)
or services are to be in foreign currency.
zz oil for the manufacture of gasoline
It is guaranteed by the bank on which it
and motor oils
is drawn (issued) because the equivalent
zz bauxite for the manufacture of
amount was paid when the draft was
aluminium
purchased.
zz Beaches can be used for the
c Two differences between payment by credit development of tourism
card and debit card are:- zz Gold can be used to manufacture
zz Credit card jewellery.
it is a form of credit facilitated by
the bank

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 Answers to exam-style questions
c Production is the process of employing
labour and capital and other inputs to make
goods and services available to consumers.
Productivity refers to how much output can
be achieved for each unit of one of the
factors of production, for example average
production for each worker employed.
2. a Two ways in which migration may benefit
each of the following are:-
i The migrant
zz to be able to obtain a higher salary
from employment
zz an opportunity to gain further work
experience and training.
ii The home country
zz The migrant may send funds home
as cash remittances to relatives
zz The migrant may return after some
years with improved skills and
accumulated capital.
b Two factors which may affect the quality of
labour are the:-
(Choose any two)
zz education of the labour force their
skills and competencies
zz technology in use how trained are the
workers to use the technology
zz type of on-the-job training provided for
employees
zz managerial systems in place for
communicating with employees
zz health and well being of the workers.
Attitude of workers is critical, whether
or not they enjoy their work and make
an effort to perform at their best.
c Four factors that may affect the location of a
business are:-
(Choose any four)
zz location of raw materials, are they
available close to the site?
zz location of the market, is it close to the
business?
zz location of energy sources, are they
available close by?
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zz availability of transportation, is there
easy access?
zz availability of labour, are the required
skills available?
zz government incentives for locating a
firm in a particular area.
3. a Three levels of production are:-
zz Subsistence production involves
producing goods for ones self and
family
zz Domestic production involves
producing goods and services for the
local market
zz Surplus production involves producing
excess goods and services for export.
b Three types of production are:-
zz Primary production involves extracting or
gathering the raw materials from nature
zz Secondary production involves
converting the raw materials into
finished or semi-finished goods, and
building construction
zz Tertiary production involves providing
services to customers, either directly or
indirectly.
c Three characteristics of a cottage
industry are:-
(Choose any three)
zz based in or close to the home of the
entrepreneur
zz uses mainly manual labour
zz operates on a small scale
zz uses mainly local raw materials
zz uses family members as labour
zz often produces handicrafts or foods.
d One way in which a cottage industry may
benefit the economy is:-
(Choose any one)
zz contributes to the GDP of the country
by adding (to a small extent) to total
production
zz the worthwhile engagement of persons
by the creation of employment
zz helps the economy by earning foreign
exchange, through exports or tourism.
 Answers to exam-style questions

4. a The distinction between a forward and 5. a T

 he difference between capital intensive and
backward linkage, and an example of each is:- labour intensive is:-
Backward linkage is when one industry or zz Capital intensive means that the

sector joins with another industry that production processes relies more on
produces its raw materials, to ensure that they machinery and equipment than on
will always have access to a ready supply. human labour.
zz Labour intensive means that more
Example:- a cheese and butter manufacturer
human effort is being used than
links with a dairy farm for its milk supply.
machinery, with the employment of a
Forward linkage is when one industry joins
large number of workers.
with another industry as a market for its
finished or semi-finished products. b Two labour intensive industries that operate
E
 xample:- a furniture manufacturer links in my country are:-
with a department store to sell its furniture. (Choose any two)
zz banana industry
b The growth of a business may affect: zz tourism industry
i Organizational structure zz handicraft industry
zz the business become more complex, zz sugarcane industry
and loses the personal touch linking
c Mechanization is the replacing of human
manager and employees in a small
and animal labour with machines in order to
business.
produce more quickly and efficiently.
zz managing the many business
 utomation is use of machines which can
A
activities becomes more difficult
complete a task with minimal human
ii Exports
intervention.
zz mass production allows for lower
costs of production d Two positive and two negative effects of
zz this allows the firm to sell its product automation and mechanization are:-
more cheaply and become more
zz tasks can be completed in a shorter time
competitive in the export market
zz more dangerous tasks can be safely done
zz The firm can sell to overseas
by machines
supermarkets and other customers
zz unemployment is created as workers are
who require large-volume
replaced by machines
production.
zz new technology is costly to install and
c Economies of scale are the benefits that are maintain.
derived by a firm, from engaging in large
6. a Two effects that Sues migration may have on
scale production.
her prospective destination country are:-
d Two examples how economies of scale may zz Sue is a well-educated which will benefit
benefit a growing business are:- her employer and may also relieve a
zz the business can afford large-scale shortage of labour in her destination
machinery and equipment, which country.
reduces the cost of production zz Sue will contribute to the variety of
zz The business can negotiate a discount cultural differences in her destination
from its suppliers, if it buys goods and country, and may add to its quality
services in large quantities. oflife.

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 Answers to exam-style questions
b Three actions which Sue would need to take
if she decides to establish a new business at
home are:-
zz she would have to find a location to set
up her business
zz she would have to source the funds
(capital) to start and operate her business
zz she would have to hire workers to
operate the business.
c Three effects that the new business would
have on her home community if she decides
to stay are:-
zz she would be providing goods and
services to the community
zz she would be providing opportunities
for employment to people
zz she would be providing a market for
other local industries producing inputs
for her business.
d Two ways in which the increase in size of the
business would have an effect on her
operations are:-
(Choose any two)
zz it would be easier to raise large amounts
of capital
zz there will be more capital available for:
extensive advertising
research and development
employing specialist personnel
labour-saving machinery
mass production allows greater
possibilities for specialisation.
she would be able to obtain special
prices and discounts from her
suppliers.
6. Marketing
1. a The product life cycle describes the way in
which sales rise and eventually fall. The
stages in the life cycle include.
zz Introduction (development, advertised
for sale)
2. a Two characteristics of perfect competition are:-
zz Growth (sales and profits increase
steadily)
zz Maturity (market established, sales
stabilise and competition is faced)
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zz Decline (sales and profits fall, product is
either pulled or revived, some goods
never reach this stage. e.g. salt, matches).
b The stage in a product life cycle in which
sales revenue covered initial development
and marketing costs is at the maturity stage.
c It is important for both the production and
marketing departments to be aware of the
position of their products in the life cycle
because:-
zz the production department need to
know when to begin research and
development on new products or
improvements to old products.
zz the marketing department need to
know in order to develop the
appropriate promotional strategies to
boost sales, etc.
d The stage in a product life cycle when there
is a focus mainly on:
i Design and development is the pre-
launch stage
ii Defending and maintaining market share
is the maturity stage
iii Developing awareness of the new
product is at the introduction stage.
e Three activities which could be used to
promote a new consumer product such as a
soap or deodorant are:-
advertising a non-personal sales
presentation technique that is used to
encourage consumers to buy a product
(radio, television or print).
sales promotion short-term incentives
given to customers to encourage sales (free
samples or banded offers).
personal selling a presentation by a
representative of a firm to prospective buyers
to persuade them to purchase a product.
(Choose any two)
zz very large numbers of buyers and sellers.
zz no buyer or seller can influence the
ruling market price by individual action.
 Answers to exam-style questions

zz all buyers and sellers have accurate b One distinction between monopolistic
knowledge about the market in which competition and each of the following:
they are engaged.
zz the product is uniform or homogeneous, i Perfect competition.
that is, it is similar in all aspects. ii A monopoly.
zz in the long run, firms can enter this
market or leave when they want to do so.

Areas of difference Monopolistic Perfect Competition Monopoly

Competition (i) (ii)
Market size Competition among Very large numbers of Only one firm operating in
many sellers. buyers and sellers the industry.
Type of product Product differentiation. The product is uniform or The production of a

Barriers to entry Free entry into the
industry in the long run.
equilibrium price
homogeneous, that At is,
theitequilibrium
is product with no close
price
demand equals
similar in all aspects. supply Supply increases
substitute.
as the price goes up
This is the
In the long run, firms can There is no entry of other
enter this market or leave firms (often legal or
when they want to do so. government restriction).
Demand increases as
the price goes down
Price

c Demand refers to the willingness and ability If demand is reduced, price will fall and a
of consumers to purchase a product at a smaller quantity will be produced.
Quantity This quantity
particular price over a given period of time. is produced

SURPLUS
equilibrium price

At the equilibrium price

In this area supply is greater than
demand equals supply Supply increases demand. Price is pushed down.
as the price goes up
This is the

At the equilibrium price

demand equals supply
Demand increases as
the price goes down In this area, demand is greater
Price

than supply. The price is pushed up.

Price

SHORTAGE
Quantity This quantity Quantity
is produced

SURPLUS
d One pricing strategy which may be used 3. a Three factors which may affect consumer
In this area supply is greater than
under
demand.monopolistic competition
Price is pushed down. is:- behaviour are:-
(Choose any one) (Choose any three)
zz Predatory pricing.At(lowering
the equilibrium price
prices to zz Price of the goods. A low price may
demand equals supply
get rid of unwanted competition). encourage sales.
zIn Differential
z this pricing.
area, demand (different prices for
is greater zz Price of substitutes for a particular good,
different groups of customers
than supply. The price is pushed up. and X. If substitutes are expensive, then
Price

SHORTAGE
markets). people will buy X instead.
zz Promotional pricing (i.e. a low zz Quality of the goods. Poor quality goods
Quantity
introductory price to encourage sales of discourages sales.
a new product)
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 Answers to exam-style questions
zz Taste of the consumer (likes and styles
for a type of clothing or food).
zz Income level of the consumers
(affordability). High incomes allow the
purchase of luxury goods.
zz Brand loyalty of consumers to particular
manufacturers products.
b Four activities which make up the marketing
mix are:-
zz Product: developing a product which
will appeal to the market. This may
include market research by gathering,
analysing and interpreting information
in a systematic way.
zz Pricing, which is the determination of a
particular pricing strategy for a product.
zz Promotion, for example through short-
term incentives given to customers to
encourage sales or through advertising
campaigns.
zz Placing the product, for example by
choosing distribution channels to get a
product to the consumers.
c Three methods of sales promotion are:-
(choose any three)
zz giving free samples to customers to try
the product
zz giving discount coupons (%-off) to
customers to encourage them to buy
more of the product
zz giving premiums (gifts or banded offers)
as an incentive to purchase more of a
product
zz organizing competitions to boost sales
in a particular product
zz advertising the product on television to
increase public awareness.
4. a Consumerism refers to protection of
consumers as they engage in the process of
exchange to satisfy their demand for goods
and or services, while exercising their rights
5. a A form of transport which is likely to be used
and responsibilities.
b Three rights of a consumer are:-
(Choose any three)
zz redress if something is wrong you can
get it solved
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zz consumer education to be informed
about your rights and responsibilities
zz safety to be safe from harmful products
zz be heard to be given the opportunity
to voice ones dissatisfaction
zz be informed to be told about the pros
and cons of a product before purchase
zz to choose to be able to make an
independent choice on the purchase of a
product.
c Two responsibilities of a consumer are:-
(Choose any two)
zz Be alert and aware of the safety of
products before purchase
zz Collect all information and facts about a
product
zz Make decisions independently
zz Speak out and express needs and
expectations
zz Complain and seek redress if treatment
received is not fair and ethical
zz Show respect for the environment and
thus avoid waste, littering and
contributing to pollution.
d Three ways government agencies can protect
the rights of consumers are:-
zz though the passing of consumer legislation
zz by providing consumer education
programmes
zz through the establishment and
operations of government agencies e.g.
Bureau of Standards, Department of
weights and measures, etc.
e Two agencies in my country which support
consumers are:-
(Choose any two)
zz Consumer Affairs Division
zz Office of the Ombudsman
zz Regulated Industries Commission
zz Bureau of Standards
for each of the following are:-
i Long distance transport of oil or
natural gas.
zz Pipeline because it will be cheaper
 Answers to exam-style questions
ii Raw sugar transported by sea.
zz Bulk carriers because they can
carry heavy loads, which gives
economies of scale.
iii Consumer goods transported in large
quantities by sea.
zz Containers because the handling
costs and theft are reduced.
iv Bread transported from a bakery to
supermarkets.
zz Road because it can be transported
by van which is cheaper and allows
for more flexibility.
b Two problems which may arise as a result of
inefficient sea or air transport systems are:-
zz delays in the delivery of goods due to
poor scheduling or port congestion
zz loss of cargo as a result of improper
documentation, misdirection of goods
and theft.
c Two ways in which each of the above
problems may be avoided or resolved are:-
zz proper scheduling of deliveries
zz improved port facilities
zz careful documentation and routing
of cargo
zz proper security measures and frequent
checks at port perimeter and gates
6. a A market is a situation in which buyers and
sellers come into contact and interact for the
purpose of exchange.
Marketing is the management process
responsible for identifying, anticipating and
satisfying consumers requirements and
profitably selling a product.
b i Two reasons why it is important to
invest in a market research are:-
(Choose any two)
zz to identify consumers taste and
behaviour for a particular product
zz to determine how to price the
product
zz to identify the target market for
your product
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zz to determine the best way to
promote the product
zz to identify who are the competitors
in the market-place and what is the
size of the market.
ii Three methods which could be used for
market research are:-
zz sample survey using telephone
interviews
zz trying out a new product with a
small focus group to gauge their
response
zz observing how consumers behave
in the market place, e.g. how they
respond to shop layout and
displays.
c Two groups which a large company may
attempt to influence through its public
relations activities are:-
zz customers
zz investors
d Three activities which may form part of a
public relations strategy are :-
zz developing a good relationship with
news and communications media
sponsorship of the sporting and cultural
events
zz business entertainment of selected
clients
zz special awards to staff and customers in
recognition of the part they played in
the success of the business.
7. Business finance
1. a Two functions of a commercial bank are:-
(Choose any two)
zz to keep money for customers in
chequing and savings accounts
zz to encourage savings (by giving
interests on deposits)
zz to lend money for investment and
capital purchases
zz to provide services, such as purchase
and sale of foreign currency.
 Answers to exam-style questions

b Three services offered by a commercial iii Dividend

bankare:- Dividend is the return that shareholders
(Choose any three) receive on their investment as a share in
zz provides cheques for customers the companys profits.
zz collects payments on the customers c i Two methods of saving or investment
behalf available to individuals are:-
zz makes payments on customers behalf (Choose any two)
through standing orders zz Bank deposits saving money in a
zz makes loans to customers fixed deposit the bank
zz provides foreign exchange facilities zz Insurance policies purchasing an
zz automated banking facilities to withdraw endowment policy
funds from accounts and make deposits zz Mutual fund or Unit trust buying
zz providing safety deposit facilities units in the different funds available
zz credit facilities such as credit cards zz Shares buying shares in public
zz acts as trustees and executors for companies
customers. zz Buying bonds issued by the
c Two ways in which a commercial bank may government or other organizations
earn revenue are:- in public or private sector.
(Choose any two) ii One advantage and one disadvantage of
zz by charging fees for the various services eachmethod of saving or investment
that they provide for customers described in (i) are:-
zz from the spread between interest rate on zz Bank deposits
loans and deposits interest is received
zz from the spread between buying and may not always have access to your
selling rates for foreign exchange. money when needed (fixed
d Three ways in which a business may raise deposits), or a penalty is paid for
long-term finance are:- early withdrawal.
zz Insurance policies
zz by selling shares
provides funding for the future
zz by obtaining a loan from a development
it earns very little in the first few years
bank
and a penalty is paid for withdrawing
zz by issuing bonds for sale to investors.
fund before the policy matures.
2. a The main function of a stock exchange is to zz Mutual fund or Unit trust
provide a market where buyers and sellers of receives dividends or regular
stocks and shares can buy and sell. payments
may lose when selling units, as the
b The role of the following within the stock
market price may be lower than the
exchange are:-
original purchase price.
i Stockbrokers zz Bonds, stocks and shares
Stockbrokers buys and sells shares on receives interest
behalf of their clients (general public), If bonds are sold before maturity, they
obtaining the best deals they can for may not fetch the original price paid.
them, in return for the payment of a
commission. 3 a Three functions of a Central bank are:-
(Choose any three)
ii Depository
It is an institution which holds shares zz The government bank it manages the
and securities deposited by others. national debt and government accounts.

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 Answers to exam-style questions
zz The commercial bankers bank it is the
banker to all commercial banks, which
must by law keep an account with the
central bank.
zz The note-issuing authority it is the
only authority to issue bank notes.
zz The lender of last resort it helps
commercial banks and other financial
institutions by lending them money.
zz Maintaining foreign exchange reserves
it keeps the countrys foreign currency
reserves.
zz Financial agent for the government it
deals with international financial
agencies on behalf of the government.
b Three ways in which, Central bank could
reduce the level of demand and credit in the
economy are through:-
zz open market operations by intervening
in the financial market as both buyer
and seller of bills, securities and other
credit instruments in order to control
the money supply
zz through the reserves and liquid asset
requirements, the Central bank can
control the money supply within the
economy by adjusting the percentage of
their deposits which Commercial banks
are required to hold with the Central bank
zz changing the interest rate which the
Central bank charges on its loans to
Commercial banks as lender of last
resort, in order to influence the cost of
borrowing.
c Three ways in which the Central bank may
regulate commercial banks are:-
zz all commercial banks must hold a
banking licence from the Central bank
zz The Central bank monitors lending by
commercial banks, to ensure that
depositors funds are not put at risk.
zz the lender of last resort. It helps
commercial banks and other financial
institutions through their liquidity
problems by lending them money and
as such controls and monitors their
recovery.
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d Two differences between purchasing shares
on the stock market and saving in a
commercial bank are:-
zz when purchasing shares you have to do
it through a stock broker
zz to begin savings in a commercial bank
you can open account yourself
zz a person can receive dividends on their
shares if the company is profitable
zz a person will receive interest on the
balances in their savings account
8. Business and government
1. a Two ways in which a government may benefit
the citizens of a country and two ways it may
benefit private sector businesses are:-
Citizens
security of the state by maintaining
law and order and ensuring that all
persons receive just treatment
social services by providing services to
the public such as education, health care,
sanitation, welfare, etc.
Businesses
trade promotion by providing various
forms of assistance to encourage export
trade
making grants and loans for small
businesses through agencies such as the
Jamaica Business Development
Corporation.
b The four principle of taxation described by
Adam Smith are:-
zz equity
zz certainty
zz convenience
zz efficiency.
c A direct tax is one in which the impact
(actual payment) and the incidence (the
ultimate burden) of a tax fall on the same
person. The taxpayer makes a direct payment
to the government.
Examples:- income tax, corporation tax,
property tax, capital transfer tax, estate tax and
motor vehicle tax
 Answers to exam-style questions
An indirect tax is one in which the impact
and incidence of a tax fall on different people
Examples:- customs duties, and value added tax
For example, with value added tax, the
customer pays the cost (the ultimate burden)
but the store owner makes the actual
payment to the government.
d One way in which the government may use
the tax system to
i Redistribute income - by charging a
higher rate of income tax to those with
high incomes.
ii Encourage investment-by giving tax
exemption for investment spending on
capital goods
9. Social accounting and global trade
1. a i Standard of living indicates the value of
goods and services consumed.
Quality of life is the well being of the
people of a country, for instance their
lifespan. It includes many factors as well
as the standard of living.
ii Gross domestic product (GDP) is the
total money value of the goods and
services a country produces during a
year.
Gross national product is GDP plus
earnings from business activities
overseas, and minus the local earnings of
overseas companies.
iii National income is the sum total of
incomes received by individuals and
businesses of a country during a given
period of time
Per capita income is the average level of
income for each member of the
population.
iv Economic growth may be defined as an
increase in a countrys production, over
one or more years. It is a quantitative
change.
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 conomic development is more
E
concerned with the pattern of economic
change and it looks at the ability of a
country to meet the needs of its citizens.
It is a qualitative change.
b Two problems which may result from rapid
economic growth are:-
(Choose any two)
zz Growth involves change, which benefit
some but harm others. Social change
may create discontent. For example the
use of technology may cause people to
lose their jobs. Economic growth may
render some jobs redundant. This can
lead to technological unemployment. In
other cases, rapid economic growth may
create a labour shortage, or cause a rapid
increase in property prices.
zz It can lead to environmental destruction.
For example, landscape is damaged, flora
and fauna are destroyed, air and water
quality are damaged by pollution.
zz Growth may exploit finite resources and
in the long run this could be detrimental
to the economy. If non-renewable
resources are used up economic growth
will not be sustained.
c Two ways in which human resource
development may be promoted are:-
zz by helping to improve the knowledge
and skills of the workforce through the
educational system and on-the-job
training.
zz By improving the health of the general
population and the labour force,
controlling diseases such as malaria and
providing a clean water supply.
d Economic growth may be promoted by
investment in new industries and new
technology.
For a country which depends on tourism for
its foreign exchange earnings, there will be
negative growth it there is a decline in the
international demand for tourism.
 Answers to exam-style questions
10. The regional and global business
environment
1. a (Choose any four)
zz Caribbean Single Market and Economy
(CSME)
to provide free movement of capital,
labour (skills) and investment
to ensure an open market for goods
and services within region.
zz Organisation of Eastern Caribbean
States (OECS)
to encourage reasonable and
workable trading arrangements
among members
to facilitate the use of a single
currency (EC dollar).
zz Caribbean Community (Caricom)
to encourage growth and
development among members states
to facilitate trade among member
states free of duties.
zz World Trade Organization (WTO)
to settle trade disputes between
member countries
to administer and monitor
multilateral trade agreements
among member countries.
zz International Monetary Fund (IMF)
to finance temporary Balance of
Payment needs of members
to provide member countries with
technical advice and training.
zz Inter-American Development Bank
(IDB)
to provide loans for development
projects in member countries
to invest in programs and activities
that expand economic opportunities
for the low-income majority of the
regions population.
b Two economic problems faced by the many
countries of the Caribbean are:-
(Choose any two)
zz Debt
In many countries, government debt is
so high that much of the governments
revenue is used for interest payments.
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There is not enough revenue to pay for
improvements to schools, health care
and other services.
zz Unemployment
Unemployment means that there is
spare capacity in the economy. In the
Caribbean this arises from a number of
different factors such as a lack of
demand for local products, etc.
zz Economic dualism
Economic dualism refers to the
existence of two separate, largely
independent economies within a single
national economic framework. One
economy is based on modern industry
that uses state-of-the-art-technology,
while the other is based on traditional or
old-fashioned businesses and agriculture
or even subsistence living.
c One possible solution for each of the
problems outlined above are:-
(Choose any two)
zz Debt
The government may seek debt
forgiveness or restructuring from
foreign creditors, and be careful to
restrain expenditure so that additional
borrowing is not needed.
zz Unemployment
Government might stimulate economic
activity through extra spending, so that
businesses take on additional staff.
zz Economic dualism
Governments could try to narrow the
gap between the two sectors by investing
more in agriculture and the traditional
sector, so that hey become more
productive, and in turn making their
country more self-sufficient.