Home Country Costs of MNC Offshoring

Steps:

• Identify costs as negative impacts on the home country from MNC expansion abroad.
• Evaluate options: Focus on effects like job losses, profit flows, or competition.
• Distinguish home country (origin) from host country (abroad) impacts.
• Select option showing direct harm to home country's economy or workforce.

Why D is correct:

• Offshoring production relocates jobs abroad, causing unemployment and reduced domestic employment in the home country, per economic definitions of capital flight and labor displacement.

Why the others are wrong:

• A: Describes low-skilled job creation in the host country, benefiting it, not costing the home.
• B: Repatriated profits boost the home country's income and investment, a net gain.
• C: Firm closures from competition harm the host country's local businesses, not the home.

Final answer: D