Social Science (087) — AI-generated practice question

MNCs play a major role in the globalisation process by integrating production and markets across countries.

Role of MNCs in Globalisation:

• MNCs set up factories and offices in countries where labour and resources are cheap, increasing foreign investment.
• They control a large part of foreign trade between countries.
• They interlink production by dividing it into parts spread across different countries.

How they connect countries through trade and investment:

• MNCs invest in local companies or buy them up (e.g., Cargill Foods buying Parakh Foods).
• They export goods produced in one country to markets worldwide (e.g., Ford India exports cars to South Africa, Mexico, Brazil).
• They place orders with small local producers, linking distant economies through trade in goods and services.

Thus, MNCs drive globalisation through greater foreign trade and foreign investment, resulting in closer integration of countries.

Source: Chapter 4 — Production Across Countries; Interlinking Production Across Countries

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Examiners expect three clear points for 3 marks: (1) what MNCs do (set up production globally), (2) how they use foreign investment, and (3) how they drive foreign trade. Use the textbook examples (Ford, Cargill) to support your points — this shows you've read the chapter. Avoid vague statements; be specific about how MNCs connect countries.