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Read the information supplied and answer the questions which follow: Transnational Companies, Irish-owned firms and the agricultural industry have an important role to play in the recovery of the Irish economy - Leaving Cert Business - Question 3 - 2011
Question 3
Read the information supplied and answer the questions which follow: Transnational Companies, Irish-owned firms and the agricultural industry have an important role ... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow: Transnational Companies, Irish-owned firms and the agricultural industry have an important role to play in the recovery of the Irish economy - Leaving Cert Business - Question 3 - 2011
Step 1
Explain two benefits of the agricultural industry for the Irish economy.
Answer
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Employment Creation: The agricultural sector creates a significant number of jobs, accounting for approximately 4% of the total labour force in Ireland. This job creation not only supports rural communities but also contributes to the overall economic vitality of the country.
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Contribution to Exports: Agricultural produce is a major contributor to Ireland's export economy. By providing raw materials for the food processing industry and supporting agribusiness, this sector enhances the balance of trade, ensuring that Ireland remains competitive in international markets.
Step 2
Outline three ways in which the Irish Government could help Irish business.
Answer
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Grants through Agencies: The Government can allocate grants through organizations like Enterprise Ireland, which supports businesses in expanding and improving their operations.
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Tax Reductions: Implementing tax relief measures such as lowering corporation tax and providing VAT reductions can incentivize business growth and encourage foreign investment.
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Infrastructure Development: Investing in the development of essential infrastructure, including new motorways and transport links, can facilitate easier access for businesses to markets and resources, thus boosting economic activity.
Step 3
Explain two reasons why transnational companies (multinational companies) locate in Ireland.
Answer
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Attractive Tax Environment: Ireland's low corporate tax rate is a significant factor that attracts multinational companies. This favorable tax regime allows businesses to maximize their profits and reinvest in growth.
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Skilled Workforce: Ireland boasts a well-educated and skilled labour force, particularly in technology and finance sectors. This availability of talent makes Ireland an appealing destination for multinationals seeking to establish operations.
Step 4
The Government increased taxes on petrol and diesel in its 2011 Budget. Outline one reason for this increase in taxes.
Answer
One reason for the increase in taxes on petrol and diesel was to increase government revenue. By raising these taxes, the government aimed to enhance its fiscal position, allowing for better budget management and financial stability.
Step 5
Describe two effects of this increase in taxes.
Answer
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Increased Transport Costs: The rise in fuel taxes leads to higher transportation costs for both individuals and businesses, which can translate to increased prices for goods and services as companies pass on the costs to consumers.
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Impact on Public Transport: Increased fuel taxes may encourage more people to use public transport due to higher costs associated with driving. This shift could lead to bus and train operators seeing an uptick in passengers, though it also means that operators may face pressure to raise fares to maintain profitability.