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Difficulty: MediumThe Digital Revolution and Economic Globalization

The rapid spread of personal computers, the Internet, and satellite communications in the late twentieth century fundamentally altered the geography of production. Corporate managers could monitor operations worldwide in real time, making it efficient to decompose production processes and disperse manufacturing to lower-wage countries. Consequently, the industrial heartland of the United States experienced a steady erosion of unionized manufacturing jobs, while coastal metropolitan centers saw a surge in high-paying technology and financial services alongside a growing low-wage service sector.

Which of the following domestic trends in the United States between 1980 and the early 2000s was a direct result of the economic developments described in the passage?

  1. A widening gap in income distribution as the economy transitioned toward a service-oriented and technology-driven modelAnswer
  2. B
    The revitalization of heavy manufacturing in traditional industrial regions due to supply-side deregulation
  3. C
    A shift toward mercantilist trade agreements designed to restrict foreign imports and isolate the domestic economy
  4. D
    The expansion of Great Society social programs that effectively eliminated poverty in metropolitan centers

Answer

A widening gap in income distribution as the economy transitioned toward a service-oriented and technology-driven model
The correct option is correct because the transition from a manufacturing-based economy to a service- and technology-oriented economy, accelerated by globalization and the digital revolution, reduced the number of middle-class union manufacturing jobs. This created a bifurcated job market with highly paid tech/finance professionals on one end and low-wage service workers on the other, widening the gap in income distribution.

Step-by-Step Solution

1
Analyze the provided stimulus.
The text describes how telecommunications and the digital revolution enabled the offshoring of manufacturing jobs, creating a division between high-paying technology/financial service jobs and low-wage service jobs.
Understanding the context of globalization and technological change in Period 9 is essential to identifying its domestic impact.
2
Evaluate the domestic economic consequences of these structural changes.
The decline of high-wage, unionized manufacturing jobs, combined with the growth of low-wage service-sector employment and high-wage tech jobs, led to a more unequal income distribution.
Connecting the global economic reorganization to domestic socioeconomic trends (income inequality and labor shifts) points to the correct historical outcome.

Key Concept

The Shift to a Service and Information Economy

Hints

1
Focus on how the loss of industrial manufacturing jobs and the rise of new tech-based industries affected the earnings of different classes of American workers.
Estimated Time:1m 30s
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Topics

The Digital Revolution and Economic Globalization

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