"We live in an age of transition from a Cold War world to a space age, from an industrial age to an information age, from a world of national economies to a global economy."
— President Bill Clinton, State of the Union Address, 1996
Which of the following developments in the late twentieth century most directly facilitated the economic shift described in the excerpt?
- The expansion of digital communications technologies like the internet and personal computersAnswer
- BThe implementation of supply-side economic policies that relied on increased government spending and demand-side stimulus
- CThe collapse of the Soviet Union caused solely by increases in United States military spending
- DThe restructuring of the labor force as workers moved from industrial factories back to localized household production
Answer
The expansion of digital communications technologies like the internet and personal computers
The correct answer is correct because the expansion of digital communications technologies, such as the internet and personal computers, dramatically lowered communication and transaction costs. This facilitated global trade, outsourcing, and the transition of the United States toward a service-oriented information economy.
Step-by-Step Solution
Key Concept
The Digital Revolution and Economic Globalization