Question

“The relocation of industry to low wage countries stimulated world trade
and capital flows”. Justify the statement. 5m

Answer 1

Explanation:

(i) MNCs shifted their production units to Asian countries because of cheap labour and low wages.

(ii) Availability of raw materials and a large market.

(iii) Effects: It stimulated world trade and flow of capital. Countries like India, China and Brazil underwent rapid economic transformation. It generated employment opportunities and introduced competition in the domestic markets.

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