When the cost of making goods is lower in foreign countries than at home, it becomes cost effective for companies to buy goods made abroad.

Question

Quizplus · Accepted Answer

This is because companies aim to minimize costs and maximize profits, so if producing goods is cheaper abroad due to lower labor costs, less stringent regulations, or other factors, it becomes more cost-effective to manufacture or source goods from those foreign countries.

When the Cost of Making Goods Is Lower in Foreign