Question

Difficulty: MediumThe Digital Revolution and Economic Globalization

The table below shows the percentage of United States households with computer and internet access between 1984 and 2000.

YearU.S. Households with a Computer (%)U.S. Households with Internet Access (%)
19848.2%
198915.0%
199322.8%
199736.6%18.0%
200051.0%41.5%

*Source: U.S. Census Bureau, Current Population Survey.*

Based on the table, which of the following was a major economic consequence of the trends in computer and internet access during this period?

  1. A
    A massive expansion of federal public works programs designed to stimulate consumer demand by directly building residential internet infrastructure.
  2. The rise of a postindustrial service economy and the growth of international outsourcing for information-based jobs.Answer
  3. C
    The initial shift of industrial manufacturing from domestic households to centralized regional factories.
  4. D
    The establishment of a mercantilist trade network aimed at securing raw materials exclusively from European colonies.

Answer

The rise of a postindustrial service economy and the growth of international outsourcing for information-based jobs.
The correct answer is correct because the rapid increase in household computer ownership and internet access during the late twentieth century catalyzed the digital revolution. This technology allowed businesses to transmit information instantly and at low cost, which facilitated the transition to a postindustrial service economy and enabled the outsourcing of information technology and other service-sector jobs to countries with lower labor costs.

Step-by-Step Solution

1
Analyze the table's data and identify the chronological period (1984–2000).
The data shows a massive increase in computer ownership (from 8.2% to 51.0%) and internet access (from 18.0% to 41.5% in just three years).
This establishes the historical context as the rise of the digital revolution in the late twentieth century.
2
Connect the digital revolution to the corresponding learning objective on economic globalization.
The widespread adoption of computers and the internet enabled instant global communication and the decomposition of traditional supply chains.
This allows businesses to coordinate work internationally, leading to the rise of a service-oriented economy and outsourcing.
3
Evaluate the options to select the one that correctly identifies a late-twentieth-century economic effect.
The option concerning the rise of a postindustrial service economy and international outsourcing is the only choice that matches both the timeline and the economic consequences of this technological shift.
Other options represent either different historical eras (Market Revolution, Mercantilism) or inaccurate economic policies (demand-side public works for internet infrastructure).

Key Concept

The relationship between the digital revolution and the globalization of the service economy.
Estimated Time:1m 30s
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