The South Korean government thinks that Japan is dumping steel. South Korean firms trade with, and produce in, other countries. Some South Korean multinational companies (MNCs) claim to reduce poverty in their host countries. In 2019, South Korean firms were affected by a depreciation in South Korea's foreign exchange rate. Some firms also experienced a shortage of workers, which was influenced by the country's very low birth rate. Each question is introduced by stimulus material. In your answer you may refer to this material and/or to other examples that you have studied.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

1. [1] The sale of a product at less than cost price
2. [1] in a foreign country
3. [1] to gain a larger market share
4. [1] to get rid of surplus stock / to prevent price falling on the domestic market.
5. [1] Inflation / fall in productivity may make domestic products less internationally competitive, reducing net exports (or exports) / increasing imports.
6. [1] Income at home may rise, increasing demand for imports / diverting products from the home market.
7. [1] Incomes abroad may have fallen, reducing demand for exports.
8. [1] The rate of interest may have fallen, discouraging an inflow of funds from other countries / encouraging an outflow of funds.
9. [1] Speculation that the currency will fall in value, leading to selling of the currency.
10. [1] Inward foreign direct investment may fall / outward foreign direct investment may increase due to changes in economic activity.
11. [1] A central bank/government may sell the currency to increase exports / reduce imports / improve the balance of payments.
12. [1] Increase in supply of currency (can be shown by diagram).
13. [1] Decrease in demand for the currency (can be shown by diagram).
14. [1] A MNC could increase employment / create job opportunities, leading to some unemployed gaining jobs / falling unemployment.
15. [1] It may pay higher wages, leading to rising incomes and increasing workers' ability to buy products / basic necessities.
16. [1] It may provide accommodation and healthcare for workers.
17. [1] It may provide infrastructure, making transport/energy more affordable.
18. [1] It may provide training / invest in education, enabling people to earn higher wages in the long run.
19. [1] It may sell products at a cheaper price, enabling more goods and services to be purchased.
20. [1] It may pay taxes to the government, increasing tax revenue and enabling government spending on poverty reduction measures.
21. Why it might be a cause for concern:
22. • [1] may create an ageing population
23. • [1] may reduce size of the labour force in the future
24. • [1] may increase dependency ratio
25. • [1] may reduce tax revenue
26. • [1] may take population below the optimum level.
27. Why it might not be a cause for concern:
28. • [1] may maintain the size of the labour force in the short run as parents do not have to leave the labour force
29. • [1] may reduce overcrowding
30. • [1] may reduce pollution
31. • [1] may reduce depletion of non-renewable resources.