MNCs Questions with correct Answers

MNCs Questions with correct Answers What are the four ways an MNC can affect local economies? Create jobs, increase local standard of living, benefit local firms and improve infrastructure How does creating jobs help local economies? Creating jobs increases employment of local labour. More employment reduces number of people needing welfare, which reduces government spending. Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:00 / 0:15 Full screen Brainpower Read More How do MNCs benefit local employment? Increased local employment benefit local standard of living as employees often have better wages and working conditions than staff of local firms. How do local firms benefit from MNCs? Higher levels of employment and higher wages means more money is spent in local firms. Suppliers also benefit from MNCs operating. How do MNCs improve infrastructure? MNCs might improve infrastructure which can benefit the local community. This also reduces spending by local government. What negative effects do MNCs have on local economies? Increased competition for local staff, MNCs bringing their own labour, exploitation of local workers and creating large industrial waste. How does increased competition for local staff impact local economy negatively? Competition for local staff could force up local wages, which local firms cannot afford so local firms lose staff to MNCs. Local people could also buy from MNCs which force local businesses to go under. This reduces money in the local community as MNCs move profit out the region. How MMCs bringing their own labour impact local economy negatively? MNC bringing its own labour could put a strain in local community and its resources. This increases demand for resources to increase prices. How does exploitation of local workers negatively impact the local economy? Some MNCs might employ children or exploit local workers with long hours in difficult conditions which increases health problems and a strain on local healthcare. How does MNCs using unsustainable natural resources impact local economy? MNCs extract large quantities of unsustainable natural resources which might produce pollution and waste as well as not redevelop the landscape when there are no more resources to extract. This increases government spending. How can MNCs contribute directly to host nations? By paying taxes How can MNCs positively affect the national economy? Create large FDI flows, improve the inflow of revenue, MNCs can train staff with new skills or tech to benefit host nation, MNCs can pay for training for local suppliers, skills can be transferred if workers leave an MNC which can increase efficiency/productivity of nation, increase the level of entrepreneurship with new skills learned and benefit from economies of scale to offer cheaper products to consumers.