IGCSE Business Studies - 6.3 The International Economy Quiz

What is the best definition of globalisation?

• The reduction of international trade barriers

• The process of businesses operating only in their home country

• The movement towards a more interconnected and interdependent world economy

• The use of tariffs to restrict imports

Which of the following is a key reason for globalisation?

• Increased trade barriers

• Improvements in communication and transport technology

• Government restrictions on foreign investments

• Decreased demand for foreign goods and services

How can globalisation create opportunities for businesses?

• It allows businesses to expand into new markets

• It reduces competition from foreign businesses

• It prevents businesses from outsourcing production

• It eliminates currency exchange risks

Which of the following is a potential threat of globalisation to businesses?

• Reduced consumer choice

• Higher costs of production

• Increased competition from foreign businesses

• Government bans on international trade

What is a multinational company (MNC)?

• A company that operates in multiple cities within one country

• A company that has production or business operations in more than one country

• A company that only exports products but does not have operations abroad

• A business that is owned by the government

One advantage of becoming a multinational company is:

• Limited access to global markets

• Reduced consumer base

• Spreading risks across different countries

• Higher transport costs

How can MNCs benefit a host country?

• By reducing job opportunities

• By investing in infrastructure and technology

• By increasing local business competition

• By limiting foreign exchange earnings

Which of the following is a potential drawback of MNCs in a host country?

• Repatriation of profits to the MNC’s home country

• Increase in local employment opportunities

• Increased foreign investment in the country

• Improved access to goods and services

How can MNCs negatively impact local businesses?

• By providing more variety of goods

• By investing in local economies

• By increasing market competition, making it harder for local firms to survive

• By increasing employment rates

Which of the following is a reason for the growth of MNCs?

• Strict government regulations on foreign investment

• Decreasing global population

• Expansion into new markets to increase sales and profits

• Higher import tariffs