Question

Choose two factors that determine the location of production units of MNCs.

• A. Cheap labour and other resources
• B. Exchange rate
• C. Proximity to markets
• D. Composition

Answer 1

Answer: (A), (C)

Proximity to markets

MNCs aim to maximise their profit by reducing the production costs. Therefore, they set up offices and production units in regions where they can get labour and other resources at low costs. Another factor that determines their location is the closeness to the market, where the products are sold.