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Outsourcing Production Impact.docx - Outsourcing Production...

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Outsourcing Production Impact"Outsourcing production" is the practice of businesses having their goods or servicesproduced or delivered by another company in another nation, usually to benefit from lower costsin that nation. Therefore, outsourcing represents a sort of labor mobility even though it does notinclude the actual transfer of workers. Companies can improve their productivity and lower theirexpenses by engaging in outsourcing. These kinds of cost reductions and increases inprofitability are only going to be beneficial to the economy and to individual companies in thelong run. On the other hand, outsourcing contributes to unemployment in the near term. Bothnations can profit from trade by taking advantage of their cost differences. There will be winnersand losers as a result of income distribution impacts, though. Therefore, trade profits are viewedas net gains, where the winners could offset the losses and still come out ahead.

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