Certified Management Accountant Practice Exam

Question: 1 / 430

Which of the following is a benefit of a multinational company to its host country?

Reduction in local job opportunities

Greater financial independence for local companies

Improvement in output and efficiency

A multinational company can significantly benefit its host country by contributing to the improvement in output and efficiency. When a multinational company enters a new market, it often brings advanced technology, expertise, and best practices that can enhance production processes. This infusion of knowledge and innovation tends to increase the overall productivity of the industry and can lead to a more efficient allocation of resources in the host country's economy.

Additionally, the presence of a multinational can stimulate competition among local firms, motivating them to innovate and improve their own efficiency to maintain market relevance. This dynamic can further strengthen the host country's economic environment, fostering development and growth. This overall enhancement of efficiency and output is a key advantage that multinational companies provide to their host countries.

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Decreased competition in local markets

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