2 disadvantages of free trade are that it allows wealthy companies to out-compete local businesses in less developed countries & that many people lose their ____________ to outsourcing.
jobs
homes
1. Disadvantage of free trade: Wealthy companies out-competing local businesses in less developed countries
Free trade can lead to a scenario where wealthy multinational companies, often based in developed countries, can take advantage of lower labor costs and less stringent regulations in less developed countries. This can result in the outsourcing of production to these countries, leading to the displacement and closure of local businesses. The foreign companies can produce goods or services at lower prices due to economies of scale, advanced technology, or cheaper labor, which can make it difficult for smaller local businesses to compete and survive.
2. Disadvantage of free trade: Job loss due to outsourcing
Free trade can also result in job loss, particularly in developed countries, as companies seek to outsource production to countries with lower labor costs. This can lead to factory closures, layoffs, and downsizing in the domestic labor market. The jobs that are outsourced typically involve low-skilled or semi-skilled work, such as manufacturing or customer service roles. This can have a significant impact on affected individuals and communities, as finding new employment opportunities might be challenging, leading to socioeconomic hardships.
2 disadvantages of free trade are that it allows wealthy companies to out-compete local businesses in less developed countries, and many people lose their jobs to outsourcing.
The missing word in the sentence is "jobs". Two disadvantages of free trade are that it allows wealthy companies to out-compete local businesses in less developed countries and that many people lose their jobs to outsourcing.
To arrive at this answer, you need to understand the concept of free trade and its potential drawbacks. Free trade refers to an economic policy that allows the exchange of goods and services between countries without barriers like tariffs or quotas.
1. Wealthy companies out-competing local businesses: One of the downsides of free trade is that it can lead to the domination of wealthy multinational companies over local businesses in less developed countries. These multinational companies often have greater resources, access to advanced technology, and economies of scale, allowing them to produce goods at a lower cost and potentially drive local competitors out of business.
2. Job losses due to outsourcing: Another disadvantage of free trade is the potential impact on employment. With free trade, companies can take advantage of lower labor costs in other countries by outsourcing jobs. This means that jobs that were previously held by local workers may be relocated to foreign countries where labor is cheaper. As a result, many people may lose their jobs, leading to unemployment and economic challenges for those affected.
Overall, while free trade can bring various benefits such as access to greater market opportunities and increased efficiency, it also has potential drawbacks, including the negative impact on local businesses and job losses due to outsourcing.