Newly formed trade unions raise wages for workers in Country X, where cars are manufactured. The higher wages increase the costs for the car manufacturers, who then relocate to Country Y, where labor costs are lower. Car manufacturing begins to thrive in Country Y relative to Country X. Which answer BEST describes the concept highlighted by this scenario?
A) Changes in one market can affect markets and people in other regions of the world.
B) Trade unions always cause industries to collapse.
C) The links between markets are weakening over time.
D) Manufacturing industries are the only industries where markets are linked well.

Question

Quizplus · Accepted Answer

The scenario illustrates the concept that changes in one market (the labor market in Country X) can affect other markets (the car manufacturing industry) and people in other regions of the world (Country Y). It shows the interconnectedness of global markets and how they can be impacted by various factors. The other choices are not supported by the scenario.

Newly Formed Trade Unions Raise Wages for Workers in Country