Which of the following is a potential economic benefit of outsourced industrial production in less developed countries?

• A. Reduced foreign direct investment in the host country
• B. Decreased access to global markets for local firms
• C. Lower levels of technology transfer to the host country
• D. Increased employment opportunities and income for local workers

Answer: (D)

Verified step by step guidance

1. Understand the concept of outsourcing in the context of industrial production, which involves relocating production processes to less developed countries to take advantage of lower labor costs and other factors.
2. Identify the potential economic benefits of outsourcing for the host (less developed) country, such as increased employment opportunities, higher income for local workers, and potential technology transfer.
3. Recognize that reduced foreign direct investment, decreased access to global markets, and lower levels of technology transfer are generally considered disadvantages or negative outcomes, not benefits.
4. Focus on how outsourcing can lead to job creation in the host country, which increases income levels and can stimulate economic growth through higher consumer spending and improved living standards.
5. Conclude that among the options given, 'Increased employment opportunities and income for local workers' is the correct economic benefit of outsourced industrial production in less developed countries.