Question

Read the source given below and answer the following questions:

In general, MNCs set up production where it is close to the markets; where there is skilled and

unskilled labour available at low costs; and where the availability of other factors of production is

assured. In addition, MNCs might look for government policies that look after their interests.

Having asured themselves of these conditions, MNCs set up factories and offices for production.

Investment made by MNCs is called foreign investment. Any investment is made with the hope that

these assets will earn profits.

At times, MNCs set up production jointly with some of the local companies of these countries.

Answer the following MCQs by choosing the most appropriate option.

26.1. MNCs might look for government policies that look after their interests. Choose the options

that correctly

(a) protecting the interests of the local producers

(b) limit on foreign investment

c) increased taxation

(d) flexible labour lawsl​

Answer 1

Answer:

(i) MNCs Set-up production units at such a place where they can produce their goods at a minimum cost.

(ii) The place where markets are closer.

(iii) The place where skilled and unskilled labour is available at low cost.

(iv) Other factors of production are assured.

(v) Government policies are favourable