Economics 0455 · IGCSE · The factors of production

The factors of production — practice question

Private multinational clothing companies set up operations in developing countries in order to lower their average production costs. Which characteristic of developing countries makes them attractive for this purpose?

  • AIn developing countries, clothing workers receive low wages.
  • BIn developing countries, foreign managers are allowed to pay no income tax.
  • CIn developing countries, multinationals are allowed to take profits out of the country.
  • DIn developing countries, there is a large market for fashion clothing.

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