economicsRead the following extract and answer the following questions:Ford Motors, an American company, is one of the world’s largest automobile manufacturers, with production spread over 26 countries worldwide. Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil, and the United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.Which of the following is not a characteristic of an MNC?

Read the following extract and answer the following questions:


Ford Motors, an American company, is one of the world’s largest automobile manufacturers, with production spread over 26 countries worldwide. Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil, and the United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.


Which of the following is not a characteristic of an MNC?


  1. A
    The companies have products in more than one nation.
  2. B
    Production is organised in a complex way.
  3. C
    They have a limited amount to invest.
  4. D
    They can invest huge amounts. 

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    Solution:

    They have a limited amount to invest, which is not a characteristic of an MNC.
    MNCs are companies that have operations in more than one nation. These companies emerged as a result of globalisation. They are in production in a complex way. The basic parts of products are made in various countries, providing cheap production factors. These parts are then assembled in countries with cheap access to resources and easy access to the markets where the products are targeted. These companies have a huge amount of capital that can be invested in various countries. They help the development of the countries. The governments give concessions to these MNCs.
     
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