Globalisation: Practice Questions

Which indicator is most commonly used to measure the economic growth and total market value of goods and services produced within a country over a specific period?

A multinational corporation (MNC) invests heavily in a new market by building a factory. Which of the following is a likely positive impact of this Foreign Direct Investment (FDI) on the host country's national economy?

Consider the impact of protectionism on a domestic business that relies heavily on importing raw materials. If the government imposes a high tariff on these imports, what is the most likely consequence for the business?

What is the primary role of the World Trade Organization (WTO) in the context of global business?

Which of the following best describes the concept of structural change as a result of globalisation?

Explain one reason why a multinational corporation (MNC) might consider the Human Development Index (HDI) to be a more comprehensive indicator than GDP per capita when evaluating the long-term market potential of an emerging economy.

A large multinational corporation (MNC) specializing in high-end consumer electronics has historically benefited from trade liberalisation and the expansion of trading blocs. However, recent economic data suggests a shift towards protectionism in several of its key emerging markets, with the introduction of tariffs and domestic subsidies.

(a) Explain how the reduction in the cost of transport and communication has acted as a factor contributing to the increased significance of MNCs. (4 points)

(b) Discuss the likely impact on the MNC's profit margins and supply chain decisions if a major trading bloc it operates within decides to impose import quotas on electronic components from non-member countries. (4 points)