Globalisation MCQ 1

Questions and Answers

Reduced research and development

Access to fewer markets

Higher costs per unit

Economies of scale (correct)

Reduced tax revenue

Job losses

Economic decline

Economic growth (correct)

Microsoft is investing €2bn in its operations in New York

Google is investing €500m in its operations in Paris

Intel is investing €3.63bn in its operations in Kildare (correct)

Apple is investing €1bn in its operations in Tokyo

€10.9bn Signup and view all the answers

Advances in technology and pharmaceuticals Signup and view all the answers

Over-exploitation of natural resources Signup and view all the answers

To reduce production costs Signup and view all the answers

They are repatriated to the home country Signup and view all the answers

By using tax loopholes Signup and view all the answers

Huge unemployment Signup and view all the answers

Study Notes

Global companies can benefit from economies of scale by accessing more markets, resulting in lower costs per unit.
Job creation is a significant advantage of globalisation, with companies creating direct and indirect employment opportunities in both developed and less developed countries.

Injections by global companies can stimulate economic growth, such as Intel's €3.63bn investment in its operations in Kildare.
The presence of overseas firms can generate significant tax revenue, with 1,500 companies located in Ireland contributing €10.9bn in corporation tax in 2019.

Global companies with the resources for research and development (R&D) can drive innovation, leading to significant advances in areas like technology and pharmaceuticals.

Environmental damage occurs due to the over-exploitation of natural resources and pollution.
Workers are exploited by global companies that manufacture products in low-wage economies with poor working conditions.
Multinational corporations (MNCs) repatriate profits to their home country, resulting in a loss to the local economy where they are earned, for example, Apple.
MNCs use tax loopholes to avoid or reduce their tax liabilities, resulting in a significant loss of revenue for the host country.
These corporations have no loyalty to the host country and can leave at any time, leading to massive unemployment.
Large firms abuse their power by paying very low prices to suppliers in the host country, such as cocoa or coffee farmers in Brazil.