Questions

$(2)$

$($b$)$

Define the term economies of scale.

Explain two competitive advantages that businesses can benefit from by pursuing growth oojectives.

MNCs in the UAE

nization

e due

Multinational companies are attracted to the United Arab Emirates $($UAE$)$ because of the low taxes, poitical stability and high gross domestic product $($GDP$)$ per capita. Microsoft, Marriot Group, DHL and Ericsson all have operations in the UAE. The influx of engineering, law and accountancy firms brings managers from many countries and creates a demand for goods and services. The UAE does not have any federal income tax and there is also a $0\%$ corporation tax rate.

Dubai $($one of the seven emirates that makes the UAE$)$ has gained a reputation as being a destination for shopping, attracting many tourists from around the world. Dubai is the largest and most populous city in the UAE, with over $3\mathrm{.}46$ million people. It is one of the worlds fastest growing economies.

a$)$ Define the term multinational companies. $[2$ marks$]$ b$)$

Explain how change might affect the location of multinational companies. $(4$ marks$)$

Examine the benefits to multinational companies operating in foreign countries such as the UAE. $[6$ marks$]$