Question

Statement 1: Many developing countries are shifting towards globalisation. This involves increasing integration of economies in terms of goods and services, ideas, information, and technology.

Statement 2: The presence of multinational corporations is said to have widened the gap between the rich and the poor in developing nations.

Read the statements carefully and choose the correct option below.

• A. Both statements are true and related to each other.
• B. Statement 1 is false, but statement 2 is true.
• C. Statement 1 is true, but statement 2 is false.
• D. Both statements are false.

Answer 1

The correct option is A Both statements are true and related to each other.

Developing countries are shifting towards open markets and globalisation. This allows multinational corporations to operate in these countries. Driven as they are by profit maximisation, the presence of these multinational corporations is said to have widened the gap between the rich and the poor in developing countries. Many theorists also consider MNCs as vehicles of neo-imperialism.