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POB - P2 - JAN - 2022-1 - Answers PDF
POB - P2 - JAN - 2022-1 - Answers PDF
TEST CODE 0 1 2 4 0 0 2 0
PROFICIENCY GENERAL
REGISTRATION NUMBER
SCHOOL/CENTRE NUMBER
NAME OF SCHOOL/CENTRE
‘‘*’’Barcode Area”*”
D D M M Y Y Y Y
Current Bar Code
DATE OF BIRTH
SIGNATURE __________________________________________________
‘‘*’’Barcode Area”*”
Sequential Bar Code
POSSIBLE ANSWERS DONE BY MS. S MORGAN MAY 2022
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POSSIBLE ANSWERS DONE BY MS. S. MORGAN MAY 2022
PRINCIPLES OF BUSINESS
2 hours
4. You are advised to take some time to read through the paper and plan your answers.
5. If you need to rewrite any answer and there is not enough space to do so on the
original page, you must use the extra lined page(s) provided at the back of this
booklet. Remember to draw a line through your original answer.
6. If you use the extra page(s) you MUST write the question number clearly in
the box provided at the top of the extra page(s) and, where relevant, include
the question part beside the answer.
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Answer ALL questions.
1. Jane studied Principles of Business while attending high school and was inspired to own and
operate a business in her community.
(a) State FOUR reasons why Jane would want to establish her own business.
Jane may want to establish her own business for a number of reasons. These reasons include:
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1. A desire for financial independence- Jane may desire the opportunity to be able to generate her own income
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rather than having to rely on working for an organisation to receive a regular salary. 2. Self-
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actualization- Running a business may allow Jane to fulfil her potential and utilize her skills.
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3. Self- fulfilment -Jane may find that running a business is more satisfying and enjoyable than a
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regular job. 4.To increase control of her working life. - Jane can chose where , when and
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how hard to work. (4 marks)
(b) List THREE characteristics Jane would need to possess in order to become a successful
entrepreneur.
In order to become a successful entrepreneur Jane would need to possess or display the
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following characteristics: creative, innovative and a propensity to take risk.
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Other characteristics include: , goal-oriented, flexbile , persistent and persevering etc.
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(3 marks)
(c) State THREE reasons why Jane should conduct a feasibility study prior to establishing
her business.
Jane should conduct a feasibility study because of the following reasons: To ascertain
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the viability of the business idea- Jane should assess whteher or not the business idea is capable
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will need to identify the expenses likely to be associated with running the business.
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3. To identify the possible sources of finance- Apart from her personal savings
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Jane may need to identify other sources of funds such as bank loans or grants.
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(3 marks)
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(d) State ONE role of any TWO stakeholders that will be involved in Jane’s business.
Whilst operating her business, Jane will have to interact with a range of stakeholders
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such as her suppliers and her customers. One of the roles of her suppliers is to provide
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her business with the necessary raw materials that are of good quality so that she can
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produce her goods/services. One of the roles of her customers is to ensure that her
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(e) Explain TWO ways in which Jane’s business could contribute to the social and economic
development of her country.
Jane's business could contribute to the social and economic development of her country
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in a number of ways. One way is by providing goods and services to satisfy the needs
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and wants of citizens. For example, Jane could have conducted a research to find
out what customers want through a market research. She could then aim to satisfy
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the customers' requirements by supplying what they want at a price that they will find
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acceptable and hopefully make a profit in the process.
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2. (a) State THREE reasons why it is important for a firm to have proper documentation in all
of its business transactions.
Some of the reasons why it is important for a firm to have proper documentation in all of its
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business transactions are: 1. To safeguard and retrieve information about sales, customers
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and suppliers – For example some sales and purchases are made on credit, so records help
to ensure that sales revenues are collected and payments are made in a timely manner.
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2. To monitor business performance- for example, Owners and managers will want up-to-date
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information on sales, expenses and profits to determine if progress is being made.
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And 3. To reduce the risk of theft and fraud- Having complete and accurate records will
indicate whether discrepancies exist between the amounts of stock/cash that the business
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should have and the amount it actually has. (3 marks)
(b) Outline the purpose of EACH of the following types of business documents.
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(2 marks)
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Three types of non-life insurance policies include: product liability insurance, fidelity
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insurance and goods-in-transit insurance.
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when seeking insurance. For example, you will need to disclose whether or not your
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vehicle is new or used when taking out a motor insurance policy.
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The company as well should reveal all relevant information about the policy.
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Other principles of insurance include: the pooling of risks, subrogation, (4 marks)
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(e) Explain TWO ways in which insurance could be used to lower the risks associated with
business.
Insurance could be used to lower the risk associated with business in the
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following ways: 1. Insurance reduces the risk of operating a business, because
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it protects business owners from financial losses that will reduce profits. For
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example, catastrophic fires or major personal injury claims could halt production
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and result in bankruptcy. 2. Insurance is crucial to financial and organisational
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stability. This is because liability can quickly lead a business and its owners into
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bankruptcy. Without insurance, businesses would have to draw down their financial
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reserves or sell off assets. Insurance may be needed to repair or replace damaged
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property, or pay compensation to settle lawsuits (such as for injuries suffered on
the business premises or due to faulty equipment or products). Sole traders and
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partners with unlimited liability may have to draw on their personal savings, or sell
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their possessions. A business can offer to provide private medical and car
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insurance cover for its employees. This can be in order to attract, retain and
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motivate skilled employees to achieve business goals.
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(6 marks)
Total 20 marks
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Public relations refer to the process and activities used by a business to build a positive image
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in the minds of its customers. It is a very cost-effective way of gaining free publicity.
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The press is invited to cover activities run by the business, and these are then included in
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various newspaper, radio and television articles.
(2 marks)
(ii) Identify TWO types of public relations activities that are popular in the Caribbean.
Two types of public relations activities that are popular in the Caribbean are: sponsorships and scholarships.
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Sponsorship of activities can take place at the community or national level, e.g., sports, cultural events.
Businesses may give scholarships to employees or to their children; these are also reported in the media
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for more publicity.
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(2 marks)
(b) Outline TWO ways in which the public relations activities of a firm could benefit
communities.
Public relations activities of a firm could benefit communities in a number of ways such as:
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1. provding well needed resources that citizens within the communities were lacking for example,
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when food items are donated to the less fortunate or when a new wing is being added to a
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hospital to facilitate the accommodation of more patients. 2. fostering good relationships with
the communities and local businesses for example, businesses may become more socially and
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ethically responsible and as such they may be more protective of the environment within which
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they operate. This may result in them being more adamant about disposing of their waste properly
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and refraining from overuse of natural resources ( such as the trees)
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(4 marks)
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(c) Describe THREE factors that influence consumer behaviour.
Three factors that affect consumer behaviour are:Quality, Tastes and Preferences and Tradition. 1. Quality-
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Consumers determine quality in terms of features, durability and serviceability. They may still purchase a
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high-priced product if they perceive that it is of a high quality. For example,if the price of a Clarks shoe
to wear to school is $12000, persons may still buy if they think that its quality is superior to other brands
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even though it may be more expensive. 2. Taste and Preferences: -An individual with expensive tastes
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may only shop in certain areas or buy certain products e.g., Ralph Lauren, Kenneth Col, Gucci etc. A
change in consumers taste for goods and services will impact their demand. For example, changes
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in fashion will result in a drastic decline in demand for an outgoing fashion and a rise in demand for
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what is trendy. 3. Tradition: Tradition can refer to cultural customs that are passed from one generation
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to the next and to individual habits. Both of these can affect consumer behaviour and spending patterns.
Cultural factors (such as religion,family bonds and nationality) can affect choices and spending patterns
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in different regions and at different times of the year. For example, total spending on goods and services
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tends to increase significantly prior to and during Christmas in many countries.
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(6 marks)
Other fcators that may influence consumer behaviour are: income, brand loyalty, spending pattern,
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(d) Explain TWO ways in which a government can protect consumers through its consumer
organizations.
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The government can protect consumers through the Bureau of Standards and the
Ombudsman.The Bureau of Standards is a body responsible for setting quality standards
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for the manufacture and production of goods and services within a given country. The
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government is responsible for the creation of Bureau of Standards to ensure that goods
are labelled with correct information such as contents, size, weight, ingredients, nutritional
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value, health risks, manufacturer etc. This is to ensure that consumers know what they
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buying and if they may be at risk from any product they use. The bureau carries out regular
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checks on business enterprises to ensure that goods and services offered for sale meet the
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standards stipulated by this institution.The government is also responsible for appointment
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of the Ombudsman. The Ombudsman is a government appointed person who investigates
malpractices in injustices brought to his attention by public. The Ombudsman is a government
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official who protects the rights of citizens who may suffer any kind of injustice from dealing
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with a government agency or a government official. For example, the Ombudsman will
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investigate the death of a loved one due to the negligence of a public hospital.
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Could have also mentioned the role of the Consumer Affairs Commission (CAC)
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(6 marks)
Total 20 marks
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4. (a) Define EACH of the following terms.
(i) Logistics
Logistics is the process of organising the movement of these goods from
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one part of the supply chain to another, to ensure they are available for
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production when they are needed so that the product reaches its customer
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in the right place at the right time.
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(2 marks)
(b) State TWO differences between a ‘bill of lading’ and an ‘airway bill’.
The bill of lading and the airway bill are different in terms of the mode of
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transportation for which each is used as well as their ability to show ownership
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of goods. In relation to mode of transportation, a bill of lading is used with
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with port-to-port sea shipments, whereas an airwaybill is used with air shipments .
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As for ownership, a bill of lading is considered to be document of title, showing
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ownership of the goods its describes. An airway bill on the other hand, is simply
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evidence of the contract between the shipper and the air carrier. It is not,
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however, a document of title, like the bill of lading.
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(4 marks)
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Commodities are resources that come out of the earth such as rice, sugar, copper and oil. Fast- tracking
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the sourcing of commodities ensures that the commodities required in the production process can be
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transported to the manufacturer as rapidly as possible. For example, transporting bananas and other fruit in
refrigerated containers enables them to be fast-tracked from the grower in Winward islands to the consumers
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in the United States, United Kingdom and etc. 2) As for the security of supply, manufacturers cannot afford to
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wait for deliveries of raw materials and components. Any production time lost because of transportation problems
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with these inputs can cost the business significant sums of money. An organized transport system creates
predictability in the supply chain and will get goods to the right place at the right time. 3) Finally, as for the
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reduction of costs, when transportation is organized efficiently, costs of distribution are minimised, enabling
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businesses to be competitive. Transport is one of the major costs involved in the production of most goods.
So if its cost were to be minimized the business would have a competive advantage when marketing.
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(6 marks)
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(d) Explain TWO problems an agricultural firm may face when distributing bananas from the
Caribbean to the USA.
that was extremely hot for a period of time it may cause them to force- ripen and/or rot
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quickly. However, this problem can be mitigated by ensuring that produce are packaged
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properly (using waterproof or airtight containers), boxes are labelled with proper care
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instructions and proper storage facilities are used. 2) Misdirection of goods happen
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when goods are sent to the wrong location; this can be as result of improper labelling
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and poor communication. For example goods may be sent to Kingstown in Saint Vincent
and the Grenadines when it should have been sent to Kingston, Jamaica. However,
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this issue can be resolved by utilizing communication networks that will help in the
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tracking of the movement of goods and vehicles. Also the business could ensure that
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goods are labelled properly (correct delivery address, customer’s name etc)
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(6 marks)
Total 20 marks
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(2 marks)
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(c) State FOUR reasons why foreign businesses may be willing to invest in the Caribbean
region.
Four reasons why foreign businesses may be willing to invest in the Caribbean region are: the
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Caribbean is an ideal location, the Caribbean is very accessible, incentive programmes are
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available as well as the Caribbean has a skilled labour supply. 1)The Caribbean is an ideal
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location- Located in the centre of the Americas, the Caribbean provides the advantage of easy
access to markets in the North, South and Central America and serves as a bridge to European
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markets. 2)Accessibility- Most Caribbean countries have international airports that provide daily
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direct flights to the USA, Canada, the UK, and several other countries in Europe, as well as South
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America. Accessibility by sea via the world-renowned regional ports is also an advantage allowing
for easy access to raw materials and equipment. 3) Incentives programmes are available- Many of
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the Region’s territories offer incentives, some of which can be customized, providing the best
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opportunity for investors.4) The Caribbean has a skilled labour supply- The Caribbean is known
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for its highly skilled labour supply with an agreement that allows for the free movement of skilled
labour within CARICOM. The peoples of the Region also speak the key languages of English,
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Spanish, French and Dutch. (4 marks)
(d) Outline TWO ways in which human resource development could assist in reducing the
economic problems of CARICOM countries.
Human resource development can help in the reduction of economic problems in CARICOM countries
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in a number of ways. The development of human resources occurs through education, training and experience.
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Human resource or labour is a key factor of production. Besides its obvious function in producing goods
and services, labour is the driver of creativity, innovation and technology. 1) The development of human
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resources helps with the problem of unemployment, as people become more marketable and suitable for
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job positions. They can choose to become entrepreneurs and employers (rather than employees) when they
have been educated and trained. 2) Entrepreneurs stimulate economic activity and bring innovation in all
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areas (including rural undeveloped areas), thereby contributing to economic growth and development.
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This leads to a better quality of life for individuals and their families, and it allows for greater earning potential
(4 marks)
and a reduction in poverty.
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(e) Explain TWO ways in which a local shoe manufacturing firm can use technology to boost
its production levels.
A local shoe manufacturing firm can use technology to boost its production levels by
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utilizing specialist application such as Computer Aided Design (CAD) and Computer
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Aided Manufacturing (CAM) in its production of shoes. 1) Computer aided design (CAD)
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involves the use of technology (computer systems and software) in creating and modifying
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designs. Two-dimensional (2D) and three-dimensional (3D) designs are possible using
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CAD is used in many industries for the design of products (such as: machinery, buildings,
order to automate the manufacturing process. CAD and CAM are related: CAD would
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help in producing the shoes’ designs whereas CAM would help in the manufacturing of
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the shoes. CAM allows for the automation of processes (such as cutting, grinding,
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bending, punching, placing, spinning and gluing). CAM increases production speeds,
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reduces the wastage of raw materials as well as it leads to a consistent quality of products.
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(6 marks)
Total 20 marks
END OF TEST
IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.
01240020/J/CSEC 2022
‘‘*’’Barcode Area”*”
Sequential Bar Code
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EXTRA SPACE
If you use this extra page, you MUST write the question number clearly in the box provided.
Question No.
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01240020/J/CSEC 2022
‘‘*’’Barcode Area”*”
Sequential Bar Code
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CANDIDATE’S RECEIPT
INSTRUCTIONS TO CANDIDATE:
TEST CODE: 0 1 2 4 0 0 2 0
PROFICIENCY: GENERAL
REGISTRATION NUMBER:
Signature: ____________________________________________________________________
Date: ________________________________________________________________________
2. Ensure that this slip is detached by the Supervisor or Invigilator and given to you when you
hand in this booklet.
INSTRUCTION TO SUPERVISOR/INVIGILATOR:
Sign the declaration below, detach this slip and hand it to the candidate as his/her receipt for this booklet
collected by you.
I hereby acknowledge receipt of the candidate’s booklet for the examination stated above.
Signature: _____________________________
Supervisor/Invigilator
Date: _________________________________