Around the World in 80 Questions (Day 7): The globalization of trade

Question

The globalization of trade has been hailed as a positive force for economic growth and development. Proponents argue that increased international trade fosters competition, drives innovation, and allows countries to specialize in their comparative advantages. However, critics contend that globalization exacerbates income inequality, as the benefits of trade are often concentrated in the hands of a few wealthy individuals and corporations, while leaving the majority of the population behind.

Which of the following, if true, would weaken the proponents' argument regarding the positive impact of globalization on global economics?

(A) Developing countries that heavily rely on exports are vulnerable to economic downturns in their main trading partners.
(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.
(C) Globalization has led to the outsourcing of jobs from developed countries to countries with lower labor costs.
(D) International trade has contributed to environmental degradation and unsustainable resource consumption.
(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses.

Bunuel · Accepted Answer

Unacademy Official Explanation:

Answer: The correct Answer is E

Option (E) weakens the proponents' argument by providing evidence that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses. This implies that the positive impact of globalization may be concentrated in the hands of a few wealthy entities, rather than benefiting the broader population or local economies.

Option A supports the critics' argument but does not directly weaken the proponents' argument. While economic vulnerabilities exist, it does not challenge the claim that globalization has a positive impact on global economics.

(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.
This option supports the critics' argument but does not directly weaken the proponents' argument. It highlights a potential issue with global trade agreements, but it does not directly challenge the positive impact of globalization on global economics.

Option C supports the critics' argument but does not directly weaken the proponents' argument. It raises concerns about job outsourcing, but it does not directly challenge the claim that globalization drives economic growth and development.

Option D supports the critics' argument but does not directly weaken the proponents' argument. While environmental concerns are valid, it does not directly challenge the positive impact of globalization on global economics.

nivivacious · Answer

(A) Developing countries that heavily rely on exports are vulnerable to economic downturns in their main trading partners.
Incorrect. While this statement does highlight a potential risk of globalization, it doesn't directly challenge the proponents' argument that globalization fosters competition, drives innovation, and allows countries to specialize in their comparative advantages.

(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.
Incorrect. This statement criticizes the implementation of globalization, not globalization itself

(C) Globalization has led to the outsourcing of jobs from developed countries to countries with lower labor costs.
Incorrect. While this weakens, it doesn't necessarily weaken the proponents' argument.

(D) International trade has contributed to environmental degradation and unsustainable resource consumption.
Incorrect; it's not directly related to the economic arguments made by proponents of globalization.

(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses.
Correct; it directly challenges the proponents' argument by suggesting that the benefits of globalization are not evenly distributed, which could stifle competition and limit economic growth for local businesses.

missionmba2025 · Answer

Benefits of globalization 
> increased international trade fosters competition
> drives innovation
> allows countries to specialize in their comparative advantages

We have to weaken the benefit.

(A) Developing countries that heavily rely on exports are vulnerable to economic downturns in their main trading partners.

We are not concerned about the economic downturns here. Also, the reference to developing countries is not relevant. We are trying to weaken the benefits of globalization. Eliminate.

(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.

Works towards establishing the fact that globalization doesn't foster competition. However the reference to Global trade agreements doesn't fit well. We can keep this and look for better choice.

(C) Globalization has led to the outsourcing of jobs from developed countries to countries with lower labor costs.

Out of scope. The option harnesses general knowledge and the reference to the developed countries is irrelevant. Eliminate.

(D) International trade has contributed to environmental degradation and unsustainable resource consumption.

The effect of environment is not the concern in the argument. Eliminate.

(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses.

IMO this option does the job far better than B does. The option tells us that benefits are not enjoyed by all and the competition is somewhat biased.

IMO E

DG1989 · Answer

The globalization of trade has been hailed as a positive force for economic growth and development. Proponents argue that increased international trade fosters competition, drives innovation, and allows countries to specialize in their comparative advantages. However, critics contend that globalization exacerbates income inequality, as the benefits of trade are often concentrated in the hands of a few wealthy individuals and corporations, while leaving the majority of the population behind.

Which of the following, if true, would weaken the proponents' argument regarding the positive impact of globalization on global economics?

(A) Developing countries that heavily rely on exports are vulnerable to economic downturns in their main trading partners.
(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.
(C) Globalization has led to the outsourcing of jobs from developed countries to countries with lower labor costs.
(D) International trade has contributed to environmental degradation and unsustainable resource consumption.
(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses.

Explanation: 
Per given information:
The proponents argue that trade-globalization fosters economic growth and competition.
Critics on the other hand argue that globalization worsens the income inequality because the benefits of trade are often concentrated in the hands of a few wealthy individuals and corporations thereby leaving the majority of the population behind.

A weakner choice to the proponent's argument should demonstrate that globalization fails to promote broad-based economic development and competition.

(A) Developing countries that heavily rely on exports are vulnerable to economic downturns in their main trading partners.
 This talks about economic vulnerability which is an important concern but it does not directly weaken the proponents' core economic claim.  INCORRECT

(B) Global trade agreements often prioritize the interests of powerful nations, disadvantaging smaller economies.
 This option talks about the uneven power structure of different nations indulged in trade. It is also an important concern but does not directly weaken the proponents' claim.  INCORRECT

(C) Globalization has led to the outsourcing of jobs from developed countries to countries with lower labor costs.
 This option mentions job outsourcing, but that does not imply that the developing countries or the local businesses have been unable to benefit from this.  INCORRECT

(D) International trade has contributed to environmental degradation and unsustainable resource consumption.
 This option is out of scope. Environmental impact is indeed an important concern but it doesn't necessarily translate to any ill impact on global economies.  INCORRECT

(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses.
 This choice most directly challenges the proponents' argument by suggesting that the competition and growth effects of globalization have been concentrated in large multinational corporations rather than extending to local businesses. Hence this option undermines the claim that globalization promotes broad-based economic development and competition.  CORRECT

szcz · Answer

I think this is a very poor question. Also I do not think the explanations are satisfactory. Would be really helpful if anybody can correct me.

"Proponents argue that increased international trade fosters competition, drives innovation, and allows countries to specialize in their comparative advantages." The question asks us to weaken this part of the passage. So strengthening critics' argument cannot be the correct method.

Moving to the options, I do not think eliminating options A and C is difficult. IMHO between options B, D and E, D is not as strong as the other 2. But I think D could also have been an answer if options B or E were not present. Between options B and E, it really is a toss of the dice. Such ambiguity will not exist in official questions.

Option B seems to imply that due to powerful nations being prioritized, there will be lesser competition.Option E seems to imply that due to MNCs being prioritized, there will be lesser competition. Both these options seem to be strengthening the critics' viewpoint ("critics contend that globalization exacerbates income inequality, as the benefits of trade are often concentrated in the hands of a few wealthy individuals and corporations, while leaving the majority of the population behind.") rather than weakening the proponents. Basically any assumption we make to get 1 of these options correct, can also be used to get the other option correct.

Some expert help would be much appreciated.  GMATNinja   KarishmaB   Bunuel   IanStewart

KarishmaB · Answer

This is what the proponents argue and what we have to weaken -

Proponents argue that increased international trade fosters competition, drives innovation, and allows countries to specialize in their comparative advantages.
 
We have to give a reason why international trade MAY NOT foster competition, drive innovation, or allow countries to specialize in their comparative advantages.

None of the options do that.

(E) Studies have shown that the benefits of globalization have disproportionately flowed to multinational corporations rather than local businesses

It supports the critics' claim but certainly doesn't weaken the claim of the proponents. Because companies are allowed to sell their products in various countries, they become multinational. It is not surprising that they will reap the rewards of globalization of trade. Local businesses by definition play in the local market. How can one expect them to benefit from globalization of trade? Besides, there are many multinational companies and there could be enough competition among them and this could drive innovation. Also, proponents are discussing advantages on country level. Only some companies benefit in a country is not a logical counter point. As long as the country is benefiting, the proponents' point is valid.

(E) doesn't work. 
Neither does any other option.

RiyaJ0032 · Answer

I am not sure how E is the right answer
and how B is not

you eliminate A and B on the reasoning that it is in line with critics' argument (that globalization breeds inequality) and therefore does not challenge the proponent's claim directly

however, even E is just restating critics' argument (that the power gets vested amongst a select few) rather than challenging the proponent's claim directly

none of the options actually challenge proponent's claim

rather they build up on critics' argument

Around the World in 80 Questions (Day 7): The globalization of trade

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

Around the World in 80 Questions (Day 7): The globalization of trade

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards