Question 1
Advantages of MNCs to host states do NOT include
◦ gains from transfer pricing.
◦ technology transfer.
◦ increased tax revenue.
◦ increased employment.
Question 2
Encouraging FDI may be a risky long-term development strategy for a country as MNCs are often
◦ selling unusual products.
◦ selling products with low profit margins.
◦ footloose.
◦ concerned more with exporting than producing for the domestic market.