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Which of the following are all limitations of multinationals to a country and economy?No change in sales for local businesses, no repatriation of profits, sustainability, powerReduced sales for local businesses, repatriation of losses, unsustainability, powerReduced sales for local businesses, repatriation of profits, unsustainability, powerIncreased sales for local businesses, repatriation of profits, unsustainability, power

Question

Which of the following are all limitations of multinationals to a country and economy?No change in sales for local businesses, no repatriation of profits, sustainability, powerReduced sales for local businesses, repatriation of losses, unsustainability, powerReduced sales for local businesses, repatriation of profits, unsustainability, powerIncreased sales for local businesses, repatriation of profits, unsustainability, power

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Solution

The correct answer is "Reduced sales for local businesses, repatriation of profits, unsustainability, power".

Here's why:

  1. Reduced sales for local businesses: Multinationals often have a competitive advantage due to their size, resources, and brand recognition. This can lead to reduced sales for local businesses as they struggle to compete.

  2. Repatriation of profits: Multinationals often repatriate their profits back to their home country, which means the host country doesn't benefit as much as it could from the economic activity.

  3. Unsustainability: Multinationals may engage in unsustainable practices, such as overuse of natural resources, which can have long-term negative impacts on the host country's environment and economy.

  4. Power: Multinationals often have significant power and influence, which can lead to issues such as regulatory capture (where they influence regulations in their favor) and can make it difficult for the host country to enforce its laws and regulations.

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