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MODEL ANSWERS Principles of Business


CSEC is a registered trade mark of the Caribbean Examinations Council (CXC). PRINCIPLES OF BUSINESS Worked Solutions for CSEC Examinations 20072011 is an independent publication and has not been authorised, sponsored, or otherwise approved by CXC.

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Macmillan Education Between Towns Road, Oxford, OX4 3PP A division of Macmillan Publishers Limited Companies and representatives throughout the world ISBN 978-0-230-40741-1 Text Alvin Ramsaroop 2012 Design and illustration Macmillan Publishers Limited 2012 First published 2012 All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, transmitted in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publishers. Design by TechType Typeset by MPS Ltd Illustrations by TechType Cover design by Mike Brain Graphic Design These materials may contain links for third party websites. We have no control over, and are not responsible for, the contents of such third party websites. Please use care when accessing them. Printed and bound in Malaysia 2016 2015 2014 2013 2012 10 9 8 7 6 5 4 3 2

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1 2 3 4 5 6 7 8 9 10 Introduction Time to do some revision Paper 01 Multiple choice questions Principles of Business Paper 02 General prociency May/June 2007 Principles of Business Paper 02 General prociency May/June 2008 Principles of Business Paper 02 General prociency May/June 2009 Principles of Business Paper 02 General prociency May/June 2010 Principles of Business Paper 02 General prociency May/June 2011 How did you do? Table of topics from the Principles of Business syllabus 5 7 12 75 91 104 116 128 139 141

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What is this book about?

This book is your companion to the Caribbean Examinations Council (CXC) Secondary Education Certicate examination in Principles of Business at General Prociency level. It contains ve sets of 60 multiple choice questions similar to those that will appear on Principles of Business Paper 01, together with answers to these questions. It also contains complete answers to the questions set on the Principles of Business Paper 02 in the June series of examinations between the years 2007 and 2011. There is also an indication of how the marks are distributed so you can see how you might get partial credit for an answer even if it isnt totally correct.

How can I use this book?

This book is designed to help you increase your knowledge of Principles of Business and improve your chances of success in your forthcoming examination. One of the best ways for you to nd out exactly what you know (or dont know) and how well you can organise your knowledge is to try to answer actual examination questions taken from past papers. In addition to examination questions there is a chapter on how to revise. This will help you to draw up a revision timetable, and to stay focused on what you have to do. The chapter also includes tips from experienced examiners on how to avoid throwing away marks by making silly mistakes and how to squeeze those few extra marks by writing down what you know in the clearest possible way. Those few extra marks just might earn you a higher grade! This book is a very exible revision aid and you can use it in different ways depending on what best suits your revision programme. A  t the end of your revision programme you could simply try to answer the questions on the examination papers to check how much you know about Principles of Business by comparing your answers with those in this book. However, this book allows you to make far better use of the examination questions as an actual part of your revision programme. At the back of the book there is a Table of Topics from the Principles of Business Syllabus. This is a list of topics that together cover the entire content of the Principles of Business syllabus. Alongside each topic there is a list of questions about that topic that appear in the multiple choice tests and in the 20072011 examination papers. A  hard and daunting task, such as revising for your Principles of Business examination, is often made easier by breaking it down into smaller parts. You may decide to organise your revision programme topic 5

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by topic and test yourself at the end of each topic. Each time you complete a topic you will have the atisfaction of knowing a little more, and that will give you the condence to carry on with your studies. s Y  ou may be having trouble with particular topics. You can use the topic list to identify the questions about these topics very easily and concentrate your time on them. This might be useful at the end of your revision when time is short. After completing the questions, you might like to compare your marks with the grade indicators provided by the examination board. This will give you some idea of what grade you are likely to get in your forthcoming examination. There is far more to this book than simply providing a set of correct answers. Read the explanation given for each question carefully, even if you got the question correct. It will help you to organise your answers in order to get all of the marks available. You will be able to apply much of the advice given on examination technique and organisation when you come to answer the questions in your examination.

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School folklore abounds with stories of students who never did any revision and got a grade I in the examination. Do you believe them? Well, I suppose that every once in a while there might be a really gifted individual for whom this is true, but for the vast majority of us lesser mortals the secret to examination success (and it isnt really a secret its just common sense) is revision.

A long-term plan
Be honest with yourself and realistic in your expectations. Do you really believe you can leave things until the last minute and then do well in your examination? Of course you cant! In order to prepare yourself properly for an examination you need time. How much time depends on how hard you have worked over the period of the course, how much natural ability you have and how well you want to do in the examination. Revision is not about sitting down, opening your book at some random page and reading the text. Revision is about dividing the content of a syllabus into manageable sections and spending time specically revising those sections so that, over a period of several weeks, you cover all of the syllabus content. In order to revise efciently, you will nd it useful to keep a record of what you have done. The following table is a sample record of the revision carried out by a student in preparation for the Principles of Business examination. The topics in the table are taken from the syllabus. You will need a similar table for each of your other subjects. Subject Topic Nature of Business Internal Organisational Environment Establishing a Business Legal Aspects of a Business Production Marketing Business Finance Role of Government in an Economy Social Accounting and Global Trade Regional and Global Business Environment TOTAL HOURS 0.5h 3.0h 0.5h 4.5h 0.5h 5.5h 0.5h 5.5h 0.5h 5.5h 0.5h 6.0h 6.0h 6.0h Week 1 2.5h Principles of Business General Prociency Week 2 0.5h 3.5h 0.5h 1.5h 3.0h 0.5h 4.0h 0.5h 4.0h 0.5h 4.0h 0.5h 4.0h 0.5h 4.0h 0.5h 0.5h 0.5h 0.5h 0.5h 0.5h Week 3 Week 4 Week 5 Week 6 0.5h 0.5h 0.5h Week 7 Exam week 0.5h

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What advantages does drawing up such a table have? It divides the syllabus content up into smaller parts so you can focus on each one individually. It provides a visible record of what you have revised so that no topics are left out or neglected. It provides a visible record of how long you spent revising the subject so that time can be slowly increased as the examination week comes nearer. It provides a visible record of what you have achieved to date which, in turn, increases confidence. The timetable gives a recommended study plan over the course of a week. It is important to spend some time revising core areas on a regular basis. On any given day a student should spend between 15 minutes and 1 hour revising a particular aspect of a topic area. Over the course of a study week students should have spent between 3 and 6 hours in studying an entire topic. Revising something for less than 15 minutes doesnt really allow you enough time to get into the topic so you will achieve very little. Revise for more than 1 hour and you will probably get very tired and stop being effective. However, we are all different; you might nd that your tiredness threshold comes after 45 minutes or even sooner. You must decide on the maximum length of time you can revise effectively and organise your timetable accordingly. Sitting reading notes for even a short time can be very boring so try to make your revision time as interestingas possible by doing short bursts of different things. For example, in a 45-minute revision sessionyou might spend the rst 10 minutes revising the topic, the next 10 minutes writing down key facts and the nal 25 minutes attempting an examination question. Please note that each Paper 02 question is worth 20 marks and you have 5 questions to do in 2 hours. This means that you have at most 24 minutes to do each question. The environment within which you revise is also very important. The ideal conditions for revision will vary from student to student. Some might be happiest sitting at a table somewhere cool and quiet, while others might prefer to sit in a comfortable chair, books on their lap, with quiet music playing in the background. You may need to experiment in order to nd which conditions work best for you. However, in doing this, behonest with yourself. Revising whilst you are watching your favourite television programmes might appear to be killing two birds with one stone but can you really say you are learning effectively like that? I dont think so.

The night before the examination

Never work late the night before an examination. You need a good nights sleep before an examination. There is no problem with doing an hour or two of revision in the evening as long as you nish at least a couple of hours before you go to bed. This gives you time to unwind so that you dont lie awake in bed worrying about knowing this or knowing that.

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