Newly formed trade unions raise wages for workers in Country X where cars are manufactured. The higher wages increase costs for the car manufacturers who relocate to Country Y where labor costs are lower. Car manufacturing begins to thrive in Country Y relative to Country X. Which answer best describes the concept highlighted by this scenario?
A) Changes in one market can affect markets and people in other regions of the world.
B) Trade unions always cause industries to collapse.
C) The links between markets are weakening over time.
D) Manufacturing industries are the only industries where markets are linked well.

Question

Quizplus · Accepted Answer

This scenario highlights the concept of how changes in one market (in this case, the wages raised by newly formed trade unions in Country X) can affect markets and people in other regions of the world (in this case, car manufacturers relocating to Country Y where labor costs are lower). This demonstrates the interconnectedness of global markets and how actions taken in one country can have ripple effects on other countries and industries.

Newly Formed Trade Unions Raise Wages for Workers in Country