4.4.1 The impact of MNC's

Question 1

What is a multinational company (MNC)?

1

Answer 1

• Company with branches or manufacturing plants in several countries

Question 2

What is a pro of MNC’s impact on local labour?

1

Answer 2

• Western training = local workforce ^productive and employable

Question 3

What is a pro and con of MNC’s impact on working conditions?

2

Answer 3

• International rep to maintain so above avg conditions

- Good policies, workplace culture may prove diff

Question 4

How can MNC’s impact the national economy in terms of balance of payments?
4

Answer 4

• Countries import>export = CAD
• > currency = inflation risk
• Attract FDI = cash inflow from MNC’s cancel out CAD
• MNC withdrawal of FDI = further outflow, damaging payments of current account

Question 5

What is transfer pricing?

1

Answer 5

• MNC’s tech to adjust internal prices paid by 1 branch of operations to another, minimise total tax

Question 6

List the effects of multinationals on national economies of host countries?
6

Answer 6

• FDI flows
• Balance of payments
• Technology and skills transfer
• Effects on consumers
• Dev of business culture
• Tax revenues and transfer pricing

Question 7

How can multinationals positively and negatively affect consumers in host country?
2

Answer 7

• ^Choice

- Drive local comp out of business