How can globalization impact national economies?

Globalization significantly impacts national economies in various ways, and one of the most notable effects is its capacity to increase economic growth while simultaneously causing job displacement. As countries engage more in international trade and investment, they can access larger markets, attract foreign investment, and benefit from economies of scale. This often results in enhanced productivity and economic expansion, allowing nations to grow as they specialize in industries where they possess a comparative advantage.

However, this increased integration into the global economy also has consequences for the labor market. While some sectors may thrive and expand, others could face challenges due to increased competition from abroad. As companies seek to remain competitive, they might outsource jobs or automate processes, leading to job losses in certain sectors. This dynamic creates a situation where the economy as a whole may benefit, but individual workers or entire industries may experience hardship, highlighting the dual nature of globalization's impact on national economies.

The other options do not accurately capture the multifaceted effects of globalization. For instance, the notion that globalization decreases competition is contrary to its fundamental nature, which inherently increases competition across borders. Likewise, stating that globalization solely increases inflation rates ignores its broader economic effects, and the idea that it can completely eliminate international trade barriers overlooks the complexity of trade negotiations and the