Globalisation and the Indian Economy

What are multinational corporations (MNCs)?

• Companies that produce goods and services for local markets only.

• Companies that own or control production in more than one nation.

• Companies that focus on agricultural products and exports.

• Companies that specialize in import and distribution of foreign goods.

Why do MNCs set up offices and factories in regions with cheap labor and resources?

• To increase production costs.

• To improve local working conditions.

• To earn greater profits by reducing production costs.

• To promote local employment opportunities.

What is foreign investment made by MNCs called?

• Local investment

• Domestic investment

• International investment

• Foreign Direct Investment (FDI)

How do MNCs exert influence on production in distant locations?

• By controlling local governments.

• By setting up partnerships with local companies and buying them up.

• By restricting the export of local goods.

• By promoting local products over their own.

What is the basic function of foreign trade?

• To reduce market competition.

• To limit the choice of goods in domestic markets.

• To create opportunities for producers to reach beyond domestic markets.

• To increase import tariffs.

What does globalization refer to in the context of the passage?

• The process of rapid integration or interconnection between countries.

• The promotion of nationalistic policies in trade and production.

• The restriction of foreign investments.

• The focus on domestic markets only.

How do MNCs control production in industries like garments and footwear?

• By producing all goods in their home countries.

• By controlling local governments.

• By placing orders with small producers and selling products under their brand names.

• By promoting local products over their own.

What is the result of greater foreign investment and foreign trade between countries?

• Increased isolation of markets.

• Decreased competition between countries.

• Greater integration of production and markets across countries.

• Decreased availability of goods.

How do people usually move from one country to another in search of better opportunities?

• To escape natural disasters.

• To improve political situations.

• In search of better income, better jobs, or better education.

• Due to religious reasons.

Which of the following is an example of foreign direct investment (FDI)?

• Importing goods from another country.

• Setting up a local business.

• Buying shares in a foreign company.

• Establishing a factory in a foreign country.