Globilisation And Development

Question 1

What does TNC stand for?

Answer 1

Transnational cooraperations

Question 2

What are TNCs?

Answer 2

TNCs are companies that produce products, sell products located in more than one country.

Question 3

How does TNCs increase globilisation?

Answer 3

Linking together countries through the production and sale of goods and also bring the culture from their country of origin to many different countries.

Question 4

How does TNCs affect economic development?

Answer 4

• They create jobs in an area which increases wealth of the area (due to taxes) and wealth of the local people (due to employment). Therefore taxes are used to improve infastructures like roads, services, schools, hospitals. People also have more money to spend.
• TNC factories are often located in poorer areas because labour is cheaper which means they make more profit.

Question 5

Define Mutiplier effect

Answer 5

This cycle (more jobs, leading to more services, leading to more jobs) is called the multiplyier effect.

Question 6

What advantages does TNCs have?

Answer 6

• TNCs creates jobs in all the countries they’re located in.
• Employees in poorer countries get a more reliable income compared to jobs like farming.
• Local companies supply the TNCs, increasing their income.
• TNCs spend money to improve the local infastructures e.g like airports and roads.
• New technology (e.g computers) and skills are brought to poorer countries.

Question 7

What disadvantages does TNCs have?

Answer 7

• Employees in poorer countries may be paid lower wages than employees in richer countries
• Employees in poorer countries may have to work long hours in poor conditions.
• Large sites will attract lots of traffic, which increases pollution in the area.
• The jobs created in poorer countries aren’t secure - the TNC could relocate the jobs to another country at any time.
• Other local companies may struggle to find businesses or workers, so they shut down.