What is limiting outsourcing?

What is limiting outsourcing?

• A. Barriers to trade for foreign companies.
• B. Government intervention to keep jobs within the home country.
• C. Policies to offshore jobs to reduce costs.
• D. Subsidies for outsourcing.

Answer: (B)

When governments take steps to keep jobs at home, they directly limit outsourcing. This kind of intervention raises the cost or risk of moving production abroad, through measures like local hiring requirements, penalties for offshoring, or incentives that prioritize domestic operations. Those actions specifically constrain firms’ decisions to outsource, making domestic production more attractive or feasible. Barriers to trade affect international commerce in general and aren’t targeted at outsourcing decisions in the same direct way. Policies or subsidies that promote offshoring would have the opposite effect, encouraging firms to move production abroad rather than restraining it.

When governments take steps to keep jobs at home, they directly limit outsourcing. This kind of intervention raises the cost or risk of moving production abroad, through measures like local hiring requirements, penalties for offshoring, or incentives that prioritize domestic operations. Those actions specifically constrain firms’ decisions to outsource, making domestic production more attractive or feasible.

Barriers to trade affect international commerce in general and aren’t targeted at outsourcing decisions in the same direct way. Policies or subsidies that promote offshoring would have the opposite effect, encouraging firms to move production abroad rather than restraining it.