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Difficulty: EasyEconomics in the Global Age

The following description is based on the global production process of consumer goods in the late twentieth century:

"The production of a typical pair of athletic shoes involved designing the shoe in the United States, sourcing natural rubber from Malaysia, fabricating the synthetic components in South Korea, assembling the final product in factories in Indonesia, and distributing it to retail stores worldwide."

The economic process described above best illustrates which of the following developments in the global age?

  1. A
    The expansion of direct colonial administrations to secure raw materials.
  2. The growth of multinational corporations and global supply chains.Answer
  3. C
    The revival of early modern mercantilist trade policies by international bodies.
  4. D
    The complete homogenization of global consumer culture.

Answer

The growth of multinational corporations and global supply chains.
The correct answer is correct because the description of designing a product in one country, sourcing materials from another, fabricating components in a third, and assembling them in a fourth before global distribution illustrates the global division of labor and supply chains managed by multinational corporations.

Step-by-Step Solution

1
Analyze the provided stimulus describing the manufacture of athletic shoes.
Identify that the production steps (design, raw material sourcing, manufacturing, assembly, and sales) occur across several different sovereign nations.
Understanding the geographical distribution of the production process is necessary to identify the economic structure.
2
Relate this international division of labor to historical developments in the late twentieth century.
Recognize that this process is managed by companies headquartered in one country but operating globally.
Associating the description with the historical context of late twentieth-century globalization helps identify the correct economic concept.
3
Select the option that matches the identified development.
Conclude that this represents the growth of multinational corporations and global supply chains.
This is the most accurate description of the globalized manufacturing network shown in the stimulus.

Key Concept

Multinational corporations and global supply chains
Estimated Time:45s
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Topics

Economics in the Global Age

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