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Which combination of global market influences would support a business’s decision to expand globally? A - HSC - SSCE Business Studies - Question 13 - 2022 - Paper 1
Question 13
Which combination of global market influences would support a business’s decision to expand globally? A. A depressed economic outlook and low interest rates B. A de... show full transcript
Worked Solution & Example Answer:Which combination of global market influences would support a business’s decision to expand globally? A - HSC - SSCE Business Studies - Question 13 - 2022 - Paper 1
Step 1
C. An improved economic outlook and low interest rates
Answer
To determine the best combination of global market influences supporting a business's decision to expand globally, it's important to analyze each option:
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Option A (A depressed economic outlook and low interest rates) may limit consumer spending and investment opportunities, thus not encouraging expansion.
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Option B (A depressed economic outlook and high interest rates) further compounds the issue by making borrowing more expensive, discouraging expansion efforts.
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Option C (An improved economic outlook and low interest rates) presents a favorable scenario where a positive outlook can increase consumer and business confidence, leading to higher sales and profitability. Low interest rates also lower the cost of financing, making it easier to invest in new markets.
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Option D (An improved economic outlook and high interest rates) could deter some businesses from expanding due to increased costs of financing despite the positive economic outlook.
Based on this analysis, the best answer is Option C, as it combines economic growth with favorable borrowing conditions, thus encouraging global expansion.