Choose the given statement is True/False:

MNCs may develop their production centres in places where only government policies are favourable.

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True

False

answer is B.

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Detailed Solution

It is false. When MNCs set up their production centres in certain countries, they do not look after only the government policies. They have a lot of other factors to look up to before setting up a production unit in any country. For example, they might look for those countries where the cost of production is less due to cheap and skilled labour as well as unskilled labour and the least possible cost of raw materials. Also, all the resources required for production might be available. Another major factor is the proximity of the host country to markets all across the world, as well as all those markets which offer a large number of prospective buyers. Therefore there are a lot of other factors apart from government policies that are looked up to by multinational corporations.

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