The impacts of MNC's

Question 1

Why is job creation a good thing for locals?

Answer 1

It helps locals develop skills.

People may relocate to work for the MNC which could cause higher demand for local businesses.

Question 2

What is an advantage and disadvantage on the local environment?

Answer 2

+ MNCs may invest in building local parks or improving local transport.
- MNCs may pollute the area causing damage to the environment

Question 3

What is an advantage for locals if an MNC invests in local infrastructure?

Answer 3

It can benefit the whole community and local businesses may also benefit from this investment.

Question 4

How can an MNC benefit a country from FDI?

Answer 4

FDI can:

• increase employment
• increase incomes
• increase tax revenue
• reduce national debt

Question 5

What is transfer pricing and what affect does it have on a national level?

Answer 5

Transfer pricing is where an MNC will ensure it is selling its products through a country with the lowest tax levels.
Some MNCs operate across countries to avoid paying high levels of taxation.
This has a negative impact on governments tax revenue.