Give two reasons why future costs and benefits should be discounted when evaluating the costs and...

Give two reasons why future costs and benefits should be discounted when evaluating the costs and benefits of a proposed regulation.

Expert Solution

Globalization advantages –

Helps boost the average growth rate of the country’s economy through improving in allocative efficacy and efficiency of the resources
It increases labor productivity and reduces capital-output ratio
It makes way for eliminating in-efficiency in the production system.
In its absence, makes the production system careless about cost-effectiveness
Attracts foreign capital as well as foreign updated technology, improving the quality of production.

Disadvantages –

Leads the way to redistribute the economic power at global level which leads to dominance of rich-powerful countries over poor nations
Results in more imports than exports resulting in growing trade deficit and balance of payment issue
Even though Globalization promotes technological adaption to increase productivity, much of it has resulted in loss of jobs.
Small scale industries cannot withstand competition due to MNCs bought by globalization.

Rahul Sunny answered 2 years ago

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