Lesson 4.4.1a

4.4.1a Impact of multinationals on the local economy Quiz: Pearson Edexcel Business, Unit 4

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.4.1a, Impact of multinationals on the local economy: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 4: Global business, written with Revision Ninja.

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The 20 questions

  1. What is the primary direct positive impact on a local economy when a multinational opens a factory?

    • Increased job creation
    • Higher import tariffs
    • Lower tax revenues
    • Decreased product demand

  2. How can a multinational operating in a local area negatively affect existing local businesses?

    • Higher government subsidies
    • Increased market competition
    • Lower land values
    • Reduced staff turnover

  3. What pressure does a rapidly expanding multinational workforce typically place on the local community?

    • Lower wage rates
    • Falling house prices
    • Reduced air pollution
    • Infrastructure strain

  4. How do local suppliers directly benefit when a multinational buys components from them?

    • Reduced market share
    • Increased sales revenue
    • Lower overall productivity
    • Higher export tariffs

  5. What impact occurs when a multinational pays higher wages than existing local employers?

    • Decreased worker mobility
    • Wage inflation pressure
    • Reduced staff turnover
    • Lower living costs

  6. What is a likely local spillover effect when a multinational enforces strict health and safety standards?

    • Increased trade barriers
    • Reduced regulatory compliance
    • Higher local standards
    • Lower labour productivity

  7. A multinational employs 1,200 local workers, and 30% of them were previously unemployed. How many were previously unemployed?

    • 120
    • 360
    • 840
    • 400

  8. Gross job creation by a multinational is reduced in net terms when local firms experience what?

    • Capital growth
    • Wage inflation
    • Job displacement
    • Supply shortages

  9. Which environmental issue is a major negative impact associated with large multinational manufacturing plants?

    • Resource conservation
    • Pollution and waste
    • Sustainable farming
    • Renewable energy use

  10. Which factor represents a financial leakage from the local economy caused by a foreign multinational?

    • Job creation
    • Infrastructure investment
    • Supply chain growth
    • Profit repatriation

  11. Which aspect of the local labour market is directly enhanced by multinational training programmes?

    • Import tariff rates
    • Local land prices
    • Business tax rates
    • Workforce skill levels

  12. Rising house prices caused by a foreign multinational's arrival most negatively affect which group?

    • Commercial landlords
    • Local estate agents
    • Property developers
    • Local renters

  13. What term describes the transfer of skills from a multinational to the wider local workforce?

    • Profit repatriation
    • Foreign exchange
    • Job displacement
    • Knowledge spillover

  14. Why does a capital-intensive multinational factory create fewer local jobs than a service-sector investment?

    • Greater local linkage
    • Higher tariff rates
    • Lower labour intensity
    • Reduced profit margins

  15. What potential benefit can nearby independent shops experience when a major multinational store opens?

    • Increased customer footfall
    • Reduced local traffic
    • Lower business rates
    • Decreased supplier costs

  16. Increased traffic congestion and noise pollution caused by a multinational factory are examples of what?

    • Negative externalities
    • Fiscal incentives
    • Economies of scale
    • Positive spillovers

  17. A multinational plant creates 500 jobs, but 200 local jobs are lost at rival firms. What is the net change in jobs?

    • 500
    • 300
    • 700
    • 200

  18. What main risk faces a local supplier relying on a single multinational for most sales?

    • Skilled labour shortages
    • Excess inventory
    • High import tariffs
    • Customer over-reliance

  19. What is the most likely impact on local suppliers when a powerful multinational buyer demands lower prices?

    • Reduced employee turnover
    • Squeezed profit margins
    • Increased export tariffs
    • Higher corporation tax

  20. How do multinationals most directly increase the productivity of local workers in a host country?

    • Import quotas
    • Technology transfer
    • Price fixing
    • Tax avoidance

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