Multinational Corporations Quiz
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Questions and Answers

Which of the following is NOT a typical factor in the development of multinational companies?

  • Government subsidies (correct)
  • Technical and financial superiority
  • Economies of scale
  • Effective marketing strategies

How do multinational companies typically experience lower costs?

  • By paying higher wages to employees.
  • By decreasing their customer base.
  • By leveraging economies of scale and better financing. (correct)
  • Through government imposed price floors.

Which of these is a primary benefit of becoming a multinational for a business?

  • Increased sales revenues through global markets. (correct)
  • Lower customer reach.
  • Decreased technical sophistication.
  • Reduced brand recognition.

What is a primary reason why multinational companies establish operations in various countries?

<p>To avoid trade barriers (B)</p> Signup and view all the answers

What is one of the advantages a business can experience by developing into a multinational?

<p>A higher public recognition in the market. (A)</p> Signup and view all the answers

How can multinational corporations minimize their tax obligations?

<p>By basing their headquarters in countries with lower tax rates (C)</p> Signup and view all the answers

What is something that multinational companies often have an advantage in?

<p>Borrowing money at cheaper rates. (A)</p> Signup and view all the answers

Which of these is considered a benefit to a country from multinational corporations?

<p>Increased tax revenue (A)</p> Signup and view all the answers

What is a potential drawback of multinational operations on a country's economy?

<p>Repatriation of profits (A)</p> Signup and view all the answers

Which of the following is NOT generally considered a benefit of multinational corporations?

<p>Increased national debt (B)</p> Signup and view all the answers

Flashcards

Economies of Scale

The ability to produce goods or services at a lower cost per unit as production volume increases. This is a key advantage for multinational companies.

Global Marketing Strategies

Multinationals can use their size to influence global marketing strategies, reaching a wider customer base and creating a strong brand image.

Technical and Financial Superiority

Multinationals often possess advanced technology and strong financial resources, allowing them to operate efficiently and compete globally.

Larger Customer Base

Multinationals can tap into diverse markets worldwide, boosting sales revenue and increasing their profits.

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Lower Costs for Multinationals

By operating in multiple countries, multinationals can leverage lower costs for resources, manufacturing, and financing, improving their profitability.

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Tax Optimization

Multinational corporations can reduce their tax burden by establishing their headquarters in countries with lower tax rates.

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Avoiding Trade Barriers

Multinationals often choose to operate in countries with fewer trade restrictions, bypassing potential hurdles in international trade.

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Benefits of Multinational Operations

Multinational corporations can bring benefits to a country's economy, such as increased income, employment, and tax revenue.

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Drawbacks of Multinational Operations

Multinational corporations can also lead to negative impacts on a country's economy, such as environmental damage, exploitation, and repatriation of profits.

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Enterprise Exploitation

The practice of taking advantage of a country's resources or workforce for profit, often at the expense of local communities.

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