Chapter 8: Multi National Corporations (MNCs) — Online MCQ Test
COMMERCE · CLASS 11th · Tamil Nadu State Board
Practice Chapter 8: Multi National Corporations (MNCs) with a free chapter-wise online MCQ test.
This chapter covers: Focusing on global business entities this chapter examines multinational corporations. Students analyze operational characteristics benefits for host countries limitations and real....
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Chapter 8: Multi National Corporations (MNCs) — Important Questions & Answers
What is the primary characteristic of a Multinational Corporation (MNC)?
- A. It operates in only one country
- B. It has business operations in more than one country
- C. It is owned by a single individual only
- D. It sells only agricultural products
Answer: B. It has business operations in more than one country
An MNC is defined by its ability to conduct business operations and have assets or facilities in at least one country other than its home country.
An MNC is defined by its ability to conduct business operations and have assets or facilities in at least one country other than its home country.
Which term is often used interchangeably with Multinational Corporation?
- A. Sole proprietorship
- B. Transnational Corporation
- C. Non-Profit Organization
- D. Local partnership
Answer: B. Transnational Corporation
Transnational Corporations (TNCs) are often considered synonymous with MNCs as they both operate across national borders.
Transnational Corporations (TNCs) are often considered synonymous with MNCs as they both operate across national borders.
MNCs often face criticism for which of the following practices?
- A. Providing excess profits to local staff
- B. Repatriation of profits to the home country
- C. Giving too much control to local governments
- D. Refusing to export products
Answer: B. Repatriation of profits to the home country
Host countries often criticize MNCs for taking profits out of the local economy and sending them back to the home country.
Host countries often criticize MNCs for taking profits out of the local economy and sending them back to the home country.
Compare MNCs to local businesses; which statement is most accurate regarding management?
- A. MNCs use centralized control from the headquarters
- B. Local businesses always follow the same management style as MNCs
- C. MNCs never use local managers
- D. MNCs lack a formal organizational structure
Answer: A. MNCs use centralized control from the headquarters
While they allow for local adaptation, MNCs maintain centralized strategic control from the home headquarters.
While they allow for local adaptation, MNCs maintain centralized strategic control from the home headquarters.
In the context of MNC financial strategy, what is 'Transfer Pricing'?
- A. The price of goods sold to the final consumer
- B. The price charged for internal transactions between branches of the same MNC
- C. The amount paid to the host government as royalties
- D. The currency exchange rate fluctuation
Answer: B. The price charged for internal transactions between branches of the same MNC
Transfer pricing refers to the prices set for goods and services transferred between different units of the same MNC, often used to minimize global tax liability.
Transfer pricing refers to the prices set for goods and services transferred between different units of the same MNC, often used to minimize global tax liability.