Labor cost advantages gained by moving into a country with low wages may be short-lived because tax increases cancel out the low-wage advantages.

Question

Quizplus · Accepted Answer

Tax increases may offset some of the labor cost advantages gained initially by moving into a country with low wages, but it is not necessarily true that they cancel out all of the advantages. Furthermore, the duration of the labor cost advantages and the impact of tax increases depend on various factors such as the specific industry, the tax system, and the overall economic conditions of the country.

Labor Cost Advantages Gained by Moving into a Country with Low