MNCs and Ways of Entering

Q. A multinational corporation or MNC is a company that owns or controls production in more than one nation.

1. False
2. True

Q. An MNC is a company that is registered in but owns and controls production in nation.

1. home country
2. one
3. foreign country
4. more than one

Q. Which of the following best describes foreign investments?

1. Foreign investments refer to the investments made by domestic companies.
2. Foreign investments refer to the investments made by MNCs in foreign countries to expand their businesses.
3. Foreign investments refer to the grants issued by the government for business expansion.
4. Foreign investments refer to interconnection between the countries.

Q. 'These are companies that own or control production in more than one nation.'

What kind of companies does the statement refer to?

1. Domestic companies
2. Multinational companies
3. Private companies
4. Foreign companies

Q. Delta Ltd., an American company, is operating in different locations of the world and planning to expand its business in India as well.

Which of the following advantages do you think the MNC can gain by investing in foreign countries?

1. Reduce their cost of operation
2. Expand production of their goods and services
3. Reach out to foreign customers easily
4. Provide large-scale job opportunities in host countries

Q. Maxix Ltd., a manufacturing company, is currently registered in India. The company is making huge profits and is looking to expand its production outside India.

How can the company achieve the goal of expansion?

1. By investing in foreign countries
2. By importing goods from foreign countries
3. By exporting goods to different countries
4. By taking loans from the World Bank

Q. Which of the following factors does not significantly influence business expansion decisions of an MNC ?

1. Availability of labour
2. Price of raw materials
3. Design of the goods to be produced
4. Operational cost of production

Q. List the benefit(s) that domestic companies receive on foreign investments?

1. Domestic companies receive technical know-how.
2. Domestic companies receive tax exemptions.
3. Domestic companies receive huge capital.
4. Domestic companies receive grants from the government.

Q. Why do MNCs hire various services from other countries?

1. To provide job opportunities in foreign countries
2. MNCs lack technical skills.
3. To keep the cost of production low and make more profits
4. MNCs usually do not serve their home countries.