（a）Explain two possible effects on TSE of the business cycle in country P moving into the recession stage． Effect 1： . Explanation： . . . . . Effect 2： . Explanation： . . . . .

Award 1 mark for each relevant effect (max 2).
Award a maximum of 3 additional marks for each explanation of the effects on TSE of the business cycle moving into the recession phase - one of which must be applied to this context.

Relevant effects might include:
- Makes it easier for TSE to recruit new employees - larger pool of unemployed people to choose from - may be more skilled people available for work
- May make it easier to resist demand for higher wages from employees with a high level of unemployment - there will be more competition amongst workers for jobs so willing to accept lower wages
- May lead to lower demand for TSE's products - consumer spending is lower - as many people have lost their jobs - so incomes are lower
- Lower priced products produced by TSE may see an increase in demand - as consumers have less income available to spend on luxury high priced items - buy cheaper substitutes
- TSE may be less willing to invest - as future sales and therefore profit may not increase for some time in country P - making it more difficult to gain a return on investment
- TSE may focus more on the export of its products to make up for the lower sales in country \(P\)
- Lower revenue - may lead to lower profits

For example: Makes it easier for TSE to recruit new employees (1) as there is a larger pool of unemployed people to choose from (1) and there may be more skilled people available to work for TSE (1) leading to an increase in the output of sports equipment (app).

Application could include: sports equipment; skilled and full-time workers; plastic raw materials; sells in more than 30 countries; factories in 10 countries; want to increase market share; a well-motivated workforce is important; uses new technology and automation for flow production; unemployment is increasing.