P3 4 FDI and Outsourcing

Which of the statements is an example of Foreign Direct Investment (FDI)?

• A Canadian company selling Canadian maple syrup in Mississippi

• A French car maker producing cars in India

• Air Canada hiring an Indian call centre for flight information

• The USA using a foreign company to drill for oil in Texas

How did FDI contribute to the enormous economic growth in China?

• Chinese workers used their wages to pay for local products.

• Foreign companies in China had to pay taxes in China

• Chinese workers gained skills and knowledge that could be used in Chinese owned factories

• All of the above

Which continent saw the lowest percentage of FDI?

• Asia

• Africa

• Europe

• Transition economies

What is another name used for Trans National Corporation?

• MNC

• MICs

• LIC

• SICK

Why does it make sense to keep a company's Research & Development in the home country instead of outsourcing it?

• Local people are more intelligent

• Local people are willing to work for less

• Company secrets cannot be easily stolen when not send overseas

• All of the above

An advantage of outsourcing part of a company to another country.

• It will reduce cost if workers in the other country work for less pay.

• It will help people in the home country to spend more time doing nothing or watch videos of cats on YouTube all day long

• It will help other countries obtain production secrets so that they can compete with the home company

• All of the above

An advantage for the people in a country where companies are outsourcing their functions?

• Even if the wages are low, it is still better than being unemployed

• They can learn skills that can be used later in other jobs

• The money that they earn will be spent and stimulate the local economy

• All of the above

When comparing the economy of TNCs and countries, where does Walmart rank?

• Number 2, just below the USA

• Number 10, just below Canada

• Number 1, more than any country

• Number 100, no company can compare with countries

Worldwide, what sector of company functions tend to be most likely to be outsourced?

• Research & Development

• IT Services

• Manufacturing

• Call centres for customer service

Choose the correct statement about TNCs that have outsourced to other destinations

• The company only pays taxes in the home country

• The company does not have to pay taxes in the new country

• The home country may find that many people will become unemployed

• Outsourcing is only used for annoying telemarketing scams