Which of the following statements about multinational corporations (MNCs) is true?

• A. MNCs are typically owned and controlled exclusively by the government.
• B. MNCs operate in more than one country and often have subsidiaries or branches abroad.
• C. MNCs are restricted to conducting business only within their home country.
• D. MNCs cannot influence global trade or investment flows.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definition of a multinational corporation (MNC). An MNC is a company that operates in multiple countries, often through subsidiaries or branches abroad.
2. Step 2: Analyze the first statement: 'MNCs are typically owned and controlled exclusively by the government.' Consider that most MNCs are privately owned or publicly traded companies, not government-owned.
3. Step 3: Evaluate the second statement: 'MNCs operate in more than one country and often have subsidiaries or branches abroad.' This aligns with the definition of MNCs and is generally true.
4. Step 4: Review the third statement: 'MNCs are restricted to conducting business only within their home country.' This contradicts the core characteristic of MNCs, which is international operation.
5. Step 5: Consider the fourth statement: 'MNCs cannot influence global trade or investment flows.' Given their size and international presence, MNCs often have significant influence on global trade and investment.