Regional economics policies based upon lower labor costs, lead to which of the following over time:
I. Increase labor costs
II. Skill shortages
III. Increased consumption
IV. Weaken currency
V. Reduced price competitivenes
VI. inflation
A) Only items I, II, and V
B) Only items I, II, III, and VI
C) Only items I, III, IV, and V
D) All of the above except IV
E) All of the above

Question

Quizplus · Accepted Answer

Policies based on lower labor costs can initially attract businesses, leading to increased demand for labor (I), which may result in skill shortages (II) as the demand for skilled workers outpaces supply. Increased employment and wages can boost consumption (III). Over time, as labor costs rise, the region may become less price competitive (V), and the increased demand can lead to inflation (VI). A weakened currency (IV) is not a direct result of policies based on lower labor costs but can be influenced by various other factors including monetary policy and trade balances.

Regional Economics Policies Based Upon Lower Labor Costs, Lead to Which