Question

Which of the following are potential problems caused by global competition?

Check all of the boxes that apply.

Companies in high-wage countries may be driven out of business.

Workers in high-wage countries may lose their jobs.

Prices for consumers could drop, making products cheaper.

Answer 1

- [x] Companies in high-wage countries may be driven out of business. — Yes, global competition can force higher-cost firms to close.
- [x] Workers in high-wage countries may lose their jobs. — Yes, jobs can be outsourced or lost to lower-cost producers.
- [ ] Prices for consumers could drop, making products cheaper. — No, lower consumer prices are generally a benefit of competition, not a problem (though they can have negative side effects for some producers).