What are arguments for globalization?

What are arguments for globalization?

• A. Reduces global wealth and raises prices.
• B. Increases global wealth, promotes lower prices, and encourages innovation.
• C. Eliminates competition and reduces efficiency.
• D. Hinders technology transfer.

Answer: (B)

Globalization works by opening markets and increasing cross-border exchange, which lets countries specialize according to what they do best. This specialization raises productivity and expands overall wealth because resources are used more efficiently on a global scale. When firms must compete with producers around the world, they seek lower costs and achieve economies of scale, which tends to push prices down for consumers. At the same time, openness accelerates the spread of technology and ideas—foreign investment, licensing, and collaboration bring new methods and innovations to more places, encouraging faster technological progress. Put together, these effects explain why globalization is argued to boost global wealth, lower prices, and spur innovation.

Globalization works by opening markets and increasing cross-border exchange, which lets countries specialize according to what they do best. This specialization raises productivity and expands overall wealth because resources are used more efficiently on a global scale. When firms must compete with producers around the world, they seek lower costs and achieve economies of scale, which tends to push prices down for consumers. At the same time, openness accelerates the spread of technology and ideas—foreign investment, licensing, and collaboration bring new methods and innovations to more places, encouraging faster technological progress. Put together, these effects explain why globalization is argued to boost global wealth, lower prices, and spur innovation.