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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 1 - 2017
Question 1
Read the information supplied and answer the questions which follow. Tourism initiatives such as the "Wild Atlantic Way", "The Ancient East" and "The Gathering" hav... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 1 - 2017
Step 1
From the information provided above, name the sector of the economy that tourism operates in. State one example of a business in the tourism industry.
Answer
Tourism operates within the Tertiary Sector, specifically the Services Sector. An example of a business in the tourism industry is a restaurant.
Step 2
Explain the two other sectors of the economy and provide one example of a business in each sector from the information provided.
Answer
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Primary Sector: This sector involves the extraction and harvesting of natural resources. An example is farming, fishing, or forestry.
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Secondary Sector: This sector includes industries that process raw materials into finished goods. An example is a construction company that builds businesses such as hotels.
Step 3
Outline three benefits to a local community of a new business setting up in an area.
Answer
- Job Creation: New businesses create jobs, reducing unemployment in the area.
- Local Economic Growth: Increased spending by new businesses stimulates the local economy, benefiting other local shops and services.
- Skills Development: Businesses often provide training and apprenticeships, enhancing the skills of the local workforce.
Step 5
(ii) Explain two taxes, other than VAT and USC, which the government collects.
Answer
- PAYE - Pay As You Earn: A direct tax on income that is deducted at source from employees' wages.
- Corporation Tax: A tax on company profits, which reduces the tax rate for foreign businesses operating in Ireland.
Step 6
Outline two effects of the lower VAT rate on businesses involved in tourism in Ireland.
Answer
- Increased Consumer Spending: With lower prices due to reduced VAT, consumers are more likely to spend money on tourism-related activities.
- Higher Profit Margins: Businesses may enjoy improved profit margins as a result of lower operating costs associated with the VAT reduction.