4.4.1

Question 1

Definition of a MNC

Answer 1

A business that is registered in one country but has operations in different countries

Question 2

3 Advantages of a MNC for economy and workers

Answer 2

-Job creation
-More competitive wages
-May offer better working conditions

Question 3

3 Disadvantages of a MNC for economy and workers

Answer 3

-May exploit workers
-May take advantage of lower labour costs and pay lower wages
-May relocate workers from other countries

Question 4

2 Advantages of a MNC for local businesses

Answer 4

-May boost local economy
-May be opportunities for partnerships or joint ventures

Question 5

2 Disadvantages of a MNC for local businesses

Answer 5

-May reduce supply of workers
-Local businesses may not be able to compete

Question 6

3 Advantages of a MNC for local communities

Answer 6

-Job opportunities
-Improve infrastructure
-Growth in tax revenue

Question 7

2 Disadvantages of a MNC for local communities

Answer 7

-Damage to environment
-May leave unsightly production facilities

Question 8

6 Impacts of MNCs on National Economy

Answer 8

-FDI Flows
-Balance of payments
-Consumers
-Business culture
-Tax revenue and transfer pricing
-Technology/skills transfer

Question 9

Advantage and Disadvantage of FDI Flows

Answer 9

+Initial lump sum
-Assets from home country now partly owned by foreign businesses

Question 10

Advantage and Disadvantage of Balance of Payments

Answer 10

+Generate inflows for country
-Profits can be sent back to home country

Question 11

Advantage and Disadvantage of Consumers

Answer 11

+Wider choice of goods
-Pushes out domestic businesses

Question 12

Advantage and Disadvantage of Business Culture

Answer 12

+Encourage entrepreneurship
-May demonstrate unethical behaviour