Which of the following statements about the shifting of production to cheaper labour are correct?
(A) If labour is cheaper elsewhere, production centres will move somewhere else.
(B) This process makes the labouring population very vulnerable and insecure.
(C) This flexibility of labour often works in favour of the workers.
(D) As labour costs grew in South Korea, production of Nike shoes widened to Vietnam and Bangladesh in the 1980s.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A and B only
(A) If labour is cheaper elsewhere, production centres will move somewhere else. — Correct. Production follows cheap labour. When labour is cheaper somewhere else, the production centres move there.
(B) This process makes the labouring population very vulnerable and insecure. — Correct. Workers can lose their jobs whenever a firm shifts, so the labouring population becomes very vulnerable and insecure.
(C) This flexibility of labour often works in favour of the workers. — Incorrect. The flexibility of labour works in favour of the producers. They can shift work freely, and the workers carry the risk.
(D) As labour costs grew in South Korea, production of Nike shoes widened to Vietnam and Bangladesh in the 1980s. — Incorrect. When labour costs grew in South Korea in the 1980s, Nike production widened to Thailand and Indonesia. Vietnam and Bangladesh are not part of the Nike example.
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