Tag: elements of business

Questions Related to elements of business

Which of the following statement is incorrect?
$(1)$ MNCs have less impact on the development process of the under developed countries.
$(2)$ Some MNCs may be 'footloose' i.e., to say - they might locate in a country to gain the tax or grant advantages but then move away when these run out.
Select the correct answer from the options given.

elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

  1. $(2)$ only

  2. $(1)$ only

  3. Both $(1)$ & $(2)$

  4. Neither $(1)$ nor $(2)$

Show answer
Correct Option: B
Explanation:

Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory is counted as a capital flow on the financial account of the balance of payments. This capital investment helps the economy develop and increase its productive capacity.

Which of the following is/are advantage of MNC's?

elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

  1. The activities of MNC's in the guest countries may be harmful to the national interests as MNC's are solely guided by the profit maximisation.

  2. MNC's restrict competition and acquire monopoly power in certain areas in the host countries.

  3. The activities of MNC's in the host countries may be harmful to the national interests as MNC's are solely guided by the profit maximization.

  4. MNC's help the most countries to reduce the imports and promote the exports by raising domestic production.

Show answer
Correct Option: D
Explanation:

Advantages of Multinational Corporations in developing countries.

  • Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory is counted as a capital flow on the financial account of the balance of payments. This capital investment helps the economy develop and increase its productive capacity.
  • The model of growth suggests that this level of investment is important for determining the level of economic growth. 
  • The inflows of capital help to finance a current account deficit. (Basically, this means that foreign investment enables developing countries to buy imports)
  • Multinational corporations provide employment. Although wages seem very low by Western standards, people in developing countries often see these new jobs as preferable to working as a subsistence farmer with even lower income..
  • Multinational firms may help improve infrastructure in the economy. They may improve the skills of their workforce. Foreign investment may stimulate spending in infrastructure such as roads and transport.
  • Multinational firms help to diversify the economy away from relying on primary products and agriculture – which are often subject to volatile prices and supply.

MNCs have great impact on the development process of the Underdeveloped countries.

elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

  1. False

  2. True

  3. Partly false

  4. None of above

Show answer
Correct Option: B
Explanation:

Advantages of Multinational Corporations in Under developing countries- 
Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory is counted as a capital flow on the financial account of the balance of payments. This capital investment helps the economy develop and increase it's productive The inflows of capital help to finance a current account deficit.  Multinational corporations provide employment. 

Some MNCs may be 'footloose'; this means that they might locate in a country to gain the tax or grant advantages then move away when these run out.

elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

  1. True

  2. False

  3. Partly false

  4. Partly true

Show answer
Correct Option: A
Explanation:

The footloose industry is a general term for an industry that can be placed and located at any location without effect from factors such as resources or transport. These industries often have spatially fixed costs, which means that the costs of the products do not change despite where the product is assembled.

Which of the following is not a fixed shop large retailer?

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. General stores

  2. Chain Stores or Multiple Shops

  3. Departmental stores

  4. None of the above

Show answer
Correct Option: A
Explanation:

A general merchant store (also known as general merchandise store, general dealer or village shop) is a rural or small town store that carries a general line of merchandise.

General goods are basic items, usually needed for everyday survival, including basic drinks, food, and some basic profession or trade skill tools. Vendors for these items can be found in just about every major city or village.

Each retail shop in case of chain stores is under the direct control of the ____________.

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. head office

  2. branch manager

  3. inspectors

  4. none of the above

Show answer
Correct Option: B

The departmental store caters to the needs of relatively_________________ of people.

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. high income group

  2. low income group

  3. Both A and B

  4. None of the above

Show answer
Correct Option: A
Explanation:

A high income economy is defined by the World Bank as a country with a gross national income per capita US$12,056 or more in 2017, calculated using the Atlas method. While the term "high income" is often used interchangeably with "First World" and "developed country", the technical definitions of these terms differ.

Goods are kept on racks with clearly labelled price and quality tags in such stores. This is a feature of which of the following store?

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. Consumer Cooperative Store

  2. Super Markets

  3. Mail Order Houses

  4. Any of the above

Show answer
Correct Option: B
Explanation:

A supermarket is a self-service shop offering a wide variety of food and household products, organized into sections and shelves. It is larger and has a wider selection than earlier grocery stores, but is smaller and more limited in the range of merchandise than a hypermarket or big box market.

Major disadvantage of large shop retailers are that they lack in providing personalized service to the customers.

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Disadvantages of large-scale retail businesses

  • Less ability to offer personal service

A small retailer may know all his clients personally due to constant interaction with them. He would know the tastes and preferences of his clients to be able to offer them a better personalized service, catering for their unique needs. A large retailer would not be able to do this as its aim is to sell, sell and sell. Time is money is such a large business and the more rapidly it sells, the higher the profit. Special small orders from customers are rarely accepted, especially if these do not generate enough cash to generate the required rate of return for the business. The customer may be considered nothing more than a number in a large superstore, but he would be a treasured regular customer for the small retail store.

  • Labour problems

The fact that it is constrained by time, pressure is transferred to the large retail store’s staff, which is expected to do more in less time. Most of the work is repetitive and they can hardly engage in conversations with the client or with colleagues. This leads to lower morale on the place of work and more costs of recruitment and retraining if workers regularly resign from their work.

  • Less control over pilfering

With a huge surface area full of thousands of items, it is difficult to have eyes all over the place to control pilfering. Large retailers are faced with the problem of people stealing small amounts from the shelves while no one is looking.  The temptation to steal is higher in a large shop than it is in a smaller shop where it is easier to be spotted by someone. Thieves may also think that it is less likely for larger retailers to notice occasional pilfered items due to the large quantities of material. Shoplifters are regularly convicted by large retailers than they are by the smaller ones. The business is faced with a loss-loss situation where it either invests in security or else it suffers the loss of pilferage. 


By selling directly to the consumers, the multiple-shop organisation is able to eliminate unnecessary middlemen in the sale of goods and services.

elements of business large scale retail trade forms of large scale retail stores types of retail organisation types of retailing

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

It is an approach to operating a retail business in which you offer products to customers through multiple retail channels. Brick-and-mortar stores, catalogs and the Internet are three primary multiple channels used by many retailers, but other, smaller retail formats exist as well.