Question

Which of the following could be a negative impact on local producers due the growth of MNCs?

• A. Restriction on business operation
• B. Losses due to fierce competition
• C. Restriction in new investment
• D. More scrutiny by the government

Answer 1

The correct option is B Losses due to fierce competition

MNCs have the capability to invest huge amounts of money while entering into new countries. Moreover, they are equipped with new technologies and can produce at a lower cost. In many cases, local producers fail to compete with such MNCs and suffer losses in their businesses.