Question

How does globalization lead to unequal distribution of wealth between countries?

• A. The developing countries dump cheaply priced products in underdeveloped countries which drive small producers out of business.
• B. All the countries countries dump cheaply priced products in other countries which drive small producers out of business.
• C. The developed countries dump cheaply priced products in underdeveloped countries which drive small producers out of business.
• D. The developing countries dump cheaply priced products in developed countries which drive small producers out of business.

Answer 1

The correct option is C The developed countries dump cheaply priced products in underdeveloped countries which drive small producers out of business.

Globalization increases economic growth of many countries but the rich and developed countries often benefit more than developing countries. The developed countries flood the markets of underdeveloped and developing countries with products priced so cheaply. Hence, the developed countries earn more by selling goods to a large number of customers. But the small scale industries in underdeveloped and developing nations cannot compete on pricing. And they gradually may go out of competition. The developed countries become wealthier at the cost of underdeveloped nations creating an unequal distribution of wealth.