Increases national production by increasing

increases national production (by increasing efficiency) and raises per capita income (by passing
savings on to consumers). For instance, by squeezing inefficiencies out of the retail supply chain,
powerful global retailers help restrain inflation and boost productivity. Some economists predict
that removing all remaining barriers to free trade would significantly boost worldwide income
and greatly benefit developing nations.
2. Generates Labor Market Flexibility in Developed Nations-Globalization supporters believe
globalization creates positive benefits by generating labor market flexibility in developed
nations. It is claimed that benefits derive from worker dislocation, or "churning" as it is called
when there is widespread job turnover throughout an economy. Flexible labor markets allow
workers to be redeployed rapidly to sectors of the economy where they are highly valued and in
demand. This also allows employees, particularly young workers, to change jobs easily with few
negative effects. For instance, a young person can gain experience and skills with an initial
employer and then move to a different job that provides a better match between employee and
employer.
3. Advances Economies of Developing Nations-Those in favor of globalization argue that
globalization and international outsourcing help to advance developing nations' economies.
A multinational corporation (MNC) is a business that has direct investments (in the form of
marketing or manufacturing subsidiaries) abroad in multiple countries. The actions of
multinationals have an influence on jobs and wages because these companies generate significant
jobs, investment, and tax revenue for the regions and nations they enter. Likewise, they can leave
thousands of people out of work when they close or scale back operations. Mergers and
acquisitions between multinationals are commonly worth billions of dollars and increasingly
involve companies based in emerging markets. Some companies have more employees than
many of the smallest countries and island nations have citizens.

15
85) A special region in which companies can engage in tariff-free importing and exporting is
called a(n) ________.
B
86) To minimize the economic inequality within developing nations, studies suggest that the
nations can boost incomes of their poorest citizens by ________.
B