Question

Which statement is generally NOT true with regard to the effect of trade on wages in developing countries?

Answer 1

Answer:

c) Foreign companies tend to reduce the overall number of jobs available in developing countries

Explanation:

The foreign companies that invest in developing countries have their primary goal to make more profit. They achieve this because they manage to produce the same products, with same quality and quantity, but much cheaper. The reason why it is much cheaper is because these companies pay the workers in the developing countries much less than they would pay in their own countries. In general, the wages tend to be around the the amount of what what be the average in the developing country. In order to get workers, these companies tend to provide slightly better working conditions, and they pay on time as well. Also, they increase the amount of jobs in the economy, which is a positive for the people and for those countries.