WorksheetsMultinationals (MNCs) and Foreign Direct Investment (FDI)
Total questions: 14
Worksheet time: 9mins
Which of the following best defines a multinational corporation?
A company that exports to many countries
A large company that imports from many countries
A company that operates in many different countries
A company that produces goods and services for a large market
Which of the following is NOT an example of a MNC?
McDonald's
Nike
British Petroleum
Apple
Laoganma
Which of the following is NOT a key feature of MNCs?
A large amount of assets, including both capital and money
Access to highly qualified managers and professionals
Limited influence over government decision making
An ability to exploit economies of scale and lower average costs with expansion
Significant advertising and marketing budgets
Which of the following best describes the term 'Foreign Direct Investment' or FDI?
When a country makes an investment into a company
When a domestic country invests into its own companies
When a company makes an investment into a foreign country
When foreign individuals invest in domestic stock markets
Select the three options below that represent three reasons for the emergence of MNCs and FDI:
Economies of scale
Higher transport and communication costs
Increased protectionism and trade restrictions
Access to cheap materials
Large customer populations in foreign markets
Air travel has significantly dropped in cost and the number of destinations have risen.
This corresponds to which of the following reasons for the emergence of MNCs:
Economies of scale
Access to cheap materials
Lower transportation costs
Access to customers in different regions
True or false: Sony (索尼中国) , the Japanese electronics company, generated more than 70% of its revenue outside of Japan.
True
False
Which of the following methods would NOT attract FDI into a country?
Tax breaks and subsidies
Grants and low interest loans
Relaxed regulations and reduced restrictions
Political instability and uncertainty
Job creation is a significant advantage for countries that receive FDI.
Which situation below indicates that a foreign company has created jobs in the United States?
American car manufacturer Ford closes down its car production plant in Detroit, Michigan and moves to Mexico.
Apple partners with electronics producer Foxconn in Shenzhen to produce its iPhone and iPad products.
Japanese car manufacturer Honda builds a production plant in Marysville, Ohio and expands to 11 other locations as well.
American company Toys R Us closes down its retail stores in the US and starts opening them in China.
Select the three advantages of MNCs and FDI to countries below:
Investment in infrastructure (the development of roads, highways and information networks)
MNCs train and educate workers when they locate in foreign countries
MNCs reduce the capital stock in foreign countries by extracting technology and high-tech equipment.
MNCs are able to minimise their tax burden to a host country and therefore limit paying taxes to the government.
MNCs profits are taxable and can generate a significant source of revenue for the government.
When MNCs setup in a new country, they may use legal creative accounting to reduce the tax burden in the host country.
Which disadvantage of MNCs is this most likely an example of:
Tax avoidance
Tax evasion
Repatriation or moving profits abroad
Tax assistance
True or false: MNCs have been accused of taking advantage of relaxed environmental regulations in developing countries.
True
False
Which of the following is a benefit of FDI in a country?
Lower interest rates
Lower exchange rates
Higher employment levels
Lower economic growth
Which of the following is an example of FDI?
The takeover of a parts supplier in Japan by Nissan
The construction of a factory in Shanghai by an American MNC
A large clothes manufacturer in Bangladesh selling clothes to a German retailer
A US $200,000,000 investment by a government in the nation's infrastructure
