Question

Which of the following statements is true?

A.) Globalization improves labor condition in delveoped countries because it encourages outsourcing.

B.) globalization is good for developing countries because it gives more power governments.

C.)globalization reduces income inequality by reducing income of the rich and increasing incomes of the poor.

D.) globalization improves labor conditions in developed countries by allowing companies to move production facilities to low cost countries.

E.) the increasing pace of globalization is a result of technological changes that lowers the cost of transportation and enhances flow of information around the globe.

Answer 1

A. False. Outsourcing will lower the demand of jobs in the developed countries as people can hire labour at a lower cost from the developing countries.

B. True. The government can used the income generated for various benefits of the people such as creating employment, improving healthcare and education. This can give them more power in terms of being re elected and giving them credibility.

C. False. Globalization increases the inequality by making the rich more the richer and the poor more poorer by widening the income gap.

D. False. By moving production facilities to low cost countries, it is creating unemployment in the developed countries thereby worsening the labour conditions.

E. True. The lowering of transport cost has made the transfer of all tangible and intangible assets faster and easier.