Question: 
Discuss whether or not MNCs are likely to set up in a country with low unemployment (8)



O/A level study resources,CTG


ANS:
MNCs are likely to set up the country because multinational companies create a significant level of employment opportunities at the local level around the world. Even in small nations, the number of jobs that are attributed to organizations with an international headquarters is quite large. Through job creation, MNCs are able to help improve standards of living in the countries where they operate. Some jobs do more than others to help reduce poverty, but perhaps more importantly, they increase overall expertise within an economy. If we accept this premise, developing countries should focus not only on creating jobs but on creating good jobs. , these companies can transform an economy quickly by providing new tools, educational resources, and financing that can shift the standard of living for the entire economy.
However, on the other hand, Multinational companies have often been criticized for their cost-cutting practices, resulting in poor working conditions and low wages paid to workers in some countries. So, employee exploitation and employment discrimination is the common negative side effect of MNC in employment in host countries.
So, therefore, MNCs will usually result in employee benefits for the host country as most employees will be locally recruited. These benefits may be relatively greater given that governments will usually try to attract firms to areas where there is relatively high unemployment or good labour supply.



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Senior Teacher ( O & A level)
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Question:
Analysis of how indirect tax may cause unemployment (6)

Ans:

Indirect taxes are taxes imposed on expenditure on goods and services -for example, sales taxes such as value-added tax (VAT). Indirect tax can negatively affect the consumption of certain types of commodities. Since the indirect tax raises the prices of taxed commodities, it can prevent people from consuming the taxed commodities. This is even worse for poor or low-income workers. As a result, the aggregate demand of a country may fall as well as fall the employment.  The introduction of an indirect tax increases the firm's costs of production. Therefore, as there is a change in the determinants of supply, the market supply curve shifts to the left. This results in a new equilibrium at a lower quantity and a higher price than the initial equilibrium. And it may reduce the employment opportunities of a country.
https://www.youtube.com/watch?v=bCQDtu5813Q&t=179s