Consider the following statements regarding the wealth of top MNCs: 1. Many of the top MNCs have wealth exceeding the entire budgets of the governments of developing countries. 2. This wealth does not translate into any significant influence over the economic policies of the host countries. 3. Due to their economic power, MNCs can determine delivery conditions for smaller producers in developing nations. Which of the statements given above is/are correct?

The correct option is 1 and 3 only. Explanation Multinational Corporations (MNCs) are large enterprises that operate in multiple countries. Their immense financial resources often grant them significant leverage in the global economy, particularly in their interactions with the governments and markets of developing nations. - Statement 1 is Correct: Many top MNCs possess wealth (assets or annual revenue) that exceeds the entire annual budgets or even the Gross Domestic Product (GDP) of many developing countries. This financial magnitude highlights the disparity between corporate power and state resources in the developing world. - Statement 2 is Incorrect: The immense wealth of MNCs translates into substantial influence over the economic policies of host countries. Governments of developing nations often compete to attract foreign investment, leading them to offer tax concessions, relaxed labour laws, or subsidies. Consequently, MNCs can exert pressure on policy formulation to suit their business interests. - Statement 3 is Correct: Due to their dominant market position and economic power, MNCs often control global supply chains. They determine the price, quality, delivery schedules, and labour conditions for smaller producers in developing nations (e.g., in the garment, footwear, or sports equipment industries). Key Takeaway: MNCs wield disproportionate economic power compared to many developing states, allowing them to influence government policies and dictate terms to smaller producers within global supply chains.

NCERT Class 10 Economics — Chapter 4: Globalisation and the Indian Economy

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Consider the following statements regarding the wealth of top MNCs:

Many of the top MNCs have wealth exceeding the entire budgets of the governments of developing countries.
This wealth does not translate into any significant influence over the economic policies of the host countries.
Due to their economic power, MNCs can determine delivery conditions for smaller producers in developing nations.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B1 and 2 only
C2 only
D1 and 3 only

Did you get this right?

Solution

The correct option is 1 and 3 only.

Explanation

Multinational Corporations (MNCs) are large enterprises that operate in multiple countries. Their immense financial resources often grant them significant leverage in the global economy, particularly in their interactions with the governments and markets of developing nations.

Statement 1 is Correct: Many top MNCs possess wealth (assets or annual revenue) that exceeds the entire annual budgets or even the Gross Domestic Product (GDP) of many developing countries. This financial magnitude highlights the disparity between corporate power and state resources in the developing world.
Statement 2 is Incorrect: The immense wealth of MNCs translates into substantial influence over the economic policies of host countries. Governments of developing nations often compete to attract foreign investment, leading them to offer tax concessions, relaxed labour laws, or subsidies. Consequently, MNCs can exert pressure on policy formulation to suit their business interests.
Statement 3 is Correct: Due to their dominant market position and economic power, MNCs often control global supply chains. They determine the price, quality, delivery schedules, and labour conditions for smaller producers in developing nations (e.g., in the garment, footwear, or sports equipment industries).

Key Takeaway: MNCs wield disproportionate economic power compared to many developing states, allowing them to influence government policies and dictate terms to smaller producers within global supply chains.

Your note

More from Chapter 4: Globalisation and the Indian Economy

The term "Containerisation" in the context of globalisation has primarily led to: 1. Huge reduction in port handling costs. 2. Increased time required for the delivery of goods to export markets. 3. Ability to load goods intact onto ships, railways, planes, and trucks. Which of the statements given above is/are correct?

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Which international organisation is primarily mandated to establish rules regarding global trade and ensure their compliance?

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The rapid improvement in which of the following has been the major factor stimulating the globalisation process?

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Which one of the following is NOT a primary factor considered by Multinational Corporations (MNCs) when establishing production units in a country?

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In the context of globalisation in India, which one of the following industries has generally remained resilient compared to others where small manufacturers faced stiff competition?

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The correct option is 1 and 3 only.

Explanation

Statement 1 is Correct: Many top MNCs possess wealth (assets or annual revenue) that exceeds the entire annual budgets or even the Gross Domestic Product (GDP) of many developing countries. This financial magnitude highlights the disparity between corporate power and state resources in the developing world.
Statement 2 is Incorrect: The immense wealth of MNCs translates into substantial influence over the economic policies of host countries. Governments of developing nations often compete to attract foreign investment, leading them to offer tax concessions, relaxed labour laws, or subsidies. Consequently, MNCs can exert pressure on policy formulation to suit their business interests.
Statement 3 is Correct: Due to their dominant market position and economic power, MNCs often control global supply chains. They determine the price, quality, delivery schedules, and labour conditions for smaller producers in developing nations (e.g., in the garment, footwear, or sports equipment industries).