Final answer:
A business owned by a foreign parent company is known as a foreign subsidiary. Multinational corporations may have subsidiaries in different countries and are integrated into local economies, influenced by local laws and cultures. They are not necessarily concentrated in the U.S. or focused on centralizing wealth in core nations.
Step-by-step explanation:
A business that is owned by a parent company located in a foreign country is referred to as a foreign subsidiary. When a large corporation, such as a multinational corporation, operates in various countries, it might have several subsidiaries. These subsidiaries can work in the production of goods and services in multiple countries, contributing to the host country's GDP, interacting with the circular flow of the economy, and adhering to local laws, taxes, and customs. Unlike a conglomerate, which is a company that owns many businesses producing unrelated products and services to diversify risk, a subsidiary is often involved in similar lines of business as the parent corporation but operates in a distinct geographic market.
It is crucial to note that a multinational corporation is not always headquartered in the United States, and their operations and business strategies don't necessarily focus on accumulating wealth in core nations. Instead, these corporations collect capital from various nationalities and conduct business on a global scale beyond national borders. Moreover, these corporations can integrate themselves within the local economies and cultures of the countries in which they operate.
A foreign firm that has sold imported goods in the United States, earned U.S. dollars, and is trying to pay expenses incurred in its home country is an example of international trade and the global operations of multinational corporations. These companies can significantly impact local and global economies, business cycles, and international relations.