This document consists of 3 printed pages and 1 blank page.
SP (SJF3884) T04099/2
© UCLES 2006
UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education Advanced Level
Paper 4 Data Response and Essay (Supplement)
2 hours 15 minutes
Additional Materials: Answer Booklet/Paper
READ THESE INSTRUCTIONS FIRST
If you have been given an Answer Booklet, follow the instructions on the front cover of the Booklet.
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use a soft pencil for any diagrams, graphs or rough working.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Answer this Question 1 and any two questions from Section B.
You may answer with reference to your own economy or other economies that you have studied where
relevant to the question.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
Answer this question.
Volkswagen seeks pay freeze in Germany.
In 2004 Volkswagen (VW) dismissed a union demand for a 4% annual pay increase
and instead announced plans to reduce paid work breaks and increase flexible
working time. It said it had to reduce its spending on labour by 30% by 2011. For the
next two years, in order to preserve its 176 500 jobs in Germany, it had to avoid pay
rises, especially because of the fierce competition in the market for cars.
The expected profits of VW were cut in 2004 because of high production costs,
weak demand and high oil prices. The company wanted to expand flexible working
time arrangements, which would allow it to save money by allowing workers to
‘bank’ overtime hours when production is high and then stay at home when
production is low but get paid from the ‘banked’ hours. They also wanted to reduce
the paid breaks and introduce a different pay system. Overtime rates woul