6BU024 Global Context for Multinational Enterprises Tutorial Week 2
Part I : Multiple choice question
A Choose the correction option for the statement provided.
1. Which of the following refers to relaxation of previous government restrictions?
Ans: Liberalisation
2. _________ means integrating the domestic economy with the world economy
Ans: Globalisation
3. ______________Refers to transfer of ownership, management and control of public sector
enterprises to the entrepreneurs in the private sector.
Ans: Privatisation
4. Which of the following is not an International Financial Institutions that facilitate the
liberalization and globalization process?
Ans: Asian Development Bank
5. Which is the following was created in an effort to promote free trade?
Ans: World Trade Organisation
6. Which of the statement is not true about Neoliberalism?
Ans: Neoliberalism advocates more government regulations.
7.____________ is a free market economic philosophy that favors the deregulation of markets and
industries, the diminution of taxes and tariffs, and the privatization of government functions, passing
them over to private business.
Ans: Neoliberalism.
8. What has been a trend in global trade since World War II_______?
Ans: Deregulation of financial markets
6BU024 Global Context for Multinational Enterprises Tutorial Week 2
Part II: Short Answer Questions
1. Discuss Neo-liberalisation as political and economic model.
Neo-liberalism is a way of running a country that focuses on free markets, less government
control, and individual responsibility. It became popular in the late 20th century, especially in
countries like the United States and the United Kingdom. Leaders like Ronald Reagan and
Margaret Thatcher promoted it, believing that reducing government interference in businesses
would make economies stronger.
Neo-liberalism encourages privatization, which means that businesses and services (such as
transportation, education, and healthcare) should be owned by private companies instead of the
government. It also supports free trade, meaning that countries should buy and sell goods with
fewer restrictions like tariffs (taxes on imported goods). This model believes that competition in
the market will lead to better products and services at lower prices. However, critics argue that
this system makes the rich richer while the poor struggle because not everyone can afford private
services. For example, if healthcare is privatized, only those who can pay will get good
treatment.
Politically, neo-liberalism promotes less government interference in people's lives. It supports
democracy, but it also encourages policies that favor businesses and corporations. Governments
following this model often cut taxes for big companies, hoping they will invest more and create
jobs. But some argue that this gives too much power to businesses and weakens government
programs meant to help the poor, like free education and public healthcare. It can also lead to job
insecurity, as companies focus on profit rather than workers’ well-being.
Neo-liberalism has helped economies grow in many ways, but it also creates economic
inequality. While businesses thrive, common people sometimes struggle to get basic services. It
remains a highly debated model, with supporters seeing it as the path to economic success and
critics viewing it as unfair to the poor.
2. How are globalization and neoliberalism linked with each other? Explain your viewpoint.
Neoliberalism and Globalization are linked to each other both focus on expanding markets,
reducing government control, and encouraging free trade. While globalization is about increasing
global connections through trade, technology, and culture, neo-liberalism is the economic model
that supports free markets and minimal government interference.
Neo-liberalism has played a major role in driving globalization. Since the 1980s, many countries
have adopted neo-liberal policies like privatization (selling government-owned businesses to
private companies) and free trade agreements (removing barriers to buying and selling goods
internationally). These policies encourage businesses to expand beyond their home countries,
increasing international trade and investment.
6BU024 Global Context for Multinational Enterprises Tutorial Week 2
For example, major companies like Apple, Nike, and McDonald's have factories and stores in
many countries. This wouldn’t be possible without neo-liberal policies that allow businesses to
operate freely across borders.
At the same time, globalization helps spread neo-liberal ideas. As countries become more
connected, international organizations like the International Monetary Fund (IMF) and the World
Bank promote neo-liberal policies by offering loans to developing countries—on the condition
that they adopt free-market policies. This means cutting government spending on public services
like healthcare and education and opening markets to foreign companies.
The connection between globalization and neo-liberalism has both positive and negative effects.
On one hand, it has led to economic growth, technological advancements, and more job
opportunities worldwide. On the other hand, it has also increased inequality, as big corporations
benefit the most while small businesses and workers often struggle.
Neoliberalism and globalization go hand in hand. Neoliberalism helps business spread globally,
and globalization helps the growth of neo liberal policies to different countries. While this has
led to economic growth, it has also created challenges like job insecurity and wealth inequality.