Foreign Investment by MNCs

Q. Why do MNCs invest in foreign countries?

1. To establish subsidiaries
2. To collaborate with companies in the host country
3. To provide jobs to people in the host country
4. To acquire assets

Q. How do the local companies benefit from a collaboration with MNCs?

1. Wages of local employees increase
2. Local companies get additional investments
3. Local companies get strategic control of the MNCs
4. MNCs generally bring the latest technology

Q. Which of the following best explains foreign investments?

1. Foreign investments refer to the investments made by domestic companies.
2. Foreign investments refer to the investments made by MNCs in a foreign country to expand their businesses.
3. Foreign investments are grants issued by the government for the expansion of business.
4. Foreign investments refer to the collaboration between countries for economic development.

Q. Which of the following benefit(s) does a local company enjoy by collaborating with a foreign MNC?

1. Access to the latest technology
2. Relaxation in terms of implementation of laws
3. Additional investment
4. Assured government grant

Q.

Investment Made by MNCs is Called

Q.

Is Coca-Cola a partnership?

Q. Walmart is an American multinational retail corporation.
In which of the following Indian companies did it buy a majority of stake?

1. Snapdeal
2. Amazon
3. Flipkart
4. Future Group

Q. Coca-Cola India Private Limited looks after the business of the parent company Coca-Cola. In this case, Coca-Cola India Private Limited can be termed as a _______.

1. subsidiary
2. alliance company
3. joint venture
4. substitute company

Q. Which of the following factors help MNCs control foreign trade significantly?

1. Size of an MNC
2. Country of origin
3. Huge investment capability
4. Restricted market

Q. Which of the following defines outsourcing?

1. It means capturing a new market where companies can sell their products to make more profit.
2. It refers to the process of investing in skill development programs for the employees of the companies.
3. It refers to the practice of reducing costs by transferring portions of work to outside suppliers rather than completing it internally.
4. It means hiring people in foreign countries and shifting them to the company headquarters after training.

Q. When an invests money in a country to expand its business, it is known as foreign investment.

1. foreign
2. MNC
3. domestic company
4. host

Q. Mr. John is an American citizen who owns a big manufacturing company. Now, he wants to set up his business in India. Which of the following factor(s) should Mr. John consider for his new venture?

1. Availability of resources
2. Technology to use for production
3. Availability of labour at low cost
4. Government policies

Q. Which of the following American companies acquired stakes in Indian retail company Flipkart in 2018?

1. SpaceX
2. Walmart
3. Amazon
4. Microsoft

Q. Many American IT companies hire services from professionals based in India.

Which of the following words/phrases indicates such a business strategy?

1. Collaboration
2. Joint venture
3. Outsourcing
4. Merger

Q. Which of the following is/are among the few initial investments a company needs to start a business?

1. Land and building
2. Raw materials
3. Marketing of goods produced
4. Machines and other equipment

Q. Spending money while expecting profits in the future is known as investment.

1. False
2. True