Globalisation and International Trade Quiz

A developing country has seen an increase in foreign companies investing in its economy. Which of the following is a possible negative impact of this trend?

• Increased job opportunities for local workers

• Loss of cultural identity due to foreign influence

• Higher government revenue through corporate taxes

• Improved infrastructure due to foreign investment

A local clothing manufacturer struggles to compete against cheaper imports from multinational corporations. What is the most effective government response?

• Encourage the firm to lower wages

• Impose tariffs on imported clothing

• Reduce corporate tax for foreign firms

• Remove all restrictions on international trade

Which of the following best explains why globalisation has increased in the past few decades?

• Decrease in consumer demand

• Advances in technology and communication

• Strict trade regulations

• Decline in multinational companies

A multinational company enters a developing country and offers wages that are higher than local standards. What is a possible negative consequence?

• Higher income inequality between local and foreign workers

• Improved working conditions for employees

• Increased job opportunities for local workers

• Higher economic growth for the host country

Which of the following is NOT a reason why some governments oppose globalisation?

• Loss of domestic industries

• Increased cultural diversity

• Dependence on foreign markets

• Rising unemployment due to outsourcing

A multinational company (MNC) sets up a factory in a developing country. What is the most likely benefit to the host country?

• Higher pollution levels

• Increased job opportunities

• Declining wages for local workers

• Loss of government revenue

A multinational company faces backlash from an environmental group in a host country. What is the best response to maintain its global reputation?

• Ignore the protests and continue operations

• Relocate to a different country

• Adopt environmentally friendly production methods

• Increase worker wages to compensate

Why might a government offer incentives for multinational companies to invest in their country?

• To allow tax evasion

• To create employment and economic growth

• To reduce local business competition

• To restrict foreign direct investment (FDI)

Which of the following most likely explains why an MNC might relocate from a developed country to a developing country?

• Higher labor costs in developing countries

• Lower tax rates and production costs

• Stricter environmental regulations in developing countries

• Reduced market size in developing countries

What is a major concern when an MNC dominates a host country’s economy?

• Lower prices for local consumers

• High levels of corporate social responsibility

• Exploitation of labor and local resources

• Increased wages for domestic workers