Even if outsourcing decreases the wage levels of some states, liberal economic theory and empirical evidence show that
A) the decreasing wage level is offset by an increase in purchasing power.
B) low wage levels tend to result in high levels of unemployment.
C) inflation tends to occur in globalized states.
D) in the long run, there is no incentive for companies to hire domestic labor.

Question

Quizplus · Accepted Answer

Liberal economic theory suggests that outsourcing can lead to lower costs and increased efficiency, which ultimately benefits consumers through lower prices and increased purchasing power. While some workers may experience lower wage levels, the overall impact on the economy can be positive as consumers have more money to spend. Additionally, empirical evidence has shown that outsourcing can lead to job creation and economic growth in the long run. Therefore, choice A is the best answer as it aligns with liberal economic theory and empirical evidence.

Even If Outsourcing Decreases the Wage Levels of Some States