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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