Social Science (087) — AI-generated practice question

MNCs set up, control, or influence production in other countries in the following ways:

1. Setting up factories/offices: MNCs invest in land, buildings, and machinery (foreign investment) to directly establish production units in other countries.

1. Joint production with local companies: MNCs partner with local firms, providing additional capital and latest technology, while benefiting from the local company's market network.

1. Buying up local companies: MNCs use their enormous wealth to acquire local companies and expand production (e.g., Cargill Foods buying Parakh Foods in India).

1. Placing orders with small producers: MNCs outsource production to small local producers and sell the products under their own brand names, controlling price, quality, and delivery conditions.

(Any three of the above)

Source: Chapter 4, "Interlinking Production Across Countries"

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Examiners look for three distinct, named methods — each with a brief explanation. The textbook lists four routes: direct investment, joint ventures, acquisition of local firms, and outsourcing to small producers. Pick any three and name them clearly; one supporting example (like Cargill–Parakh) earns full credit. Avoid writing a long paragraph — bullet/numbered points are preferred for clarity and time management.