Question

from their home country to different host countries so as to improve efficiency and profits. they can sometimes do so in relatively short time frames. examples of relocation benefits include being closer to resources, accessing cheaper labor, facing less taxes and regulation, and gaining access to host market consumers. a u.s. based food - processing company (with annual revenues of more than $40 billion) decides to move its production process from the u.s. to madagascar (2024 gdp $19.76 billion; 2025 rcii). madagascar is a key exporter of vanilla, cloves, coffee, cocoa, seafood, and other agricultural products which are important to the company. in the process of taking this step, the company negotiates a reduced tax rate with the government of madagascar. in return, the company has agreed to provide its malagasy (madagascan) employees with specialized training, and committed to maintaining its operations in madagascar for at least five years. the company laid off 1,500 u.s. workers when it opened its plant in madagascar.
question 21 (1 point)
which of the following are reasons why companies seek to branch out into different countries? (select all that apply)
□ to access cheaper labor
□ to get a higher tax rate
□ to guarantee employees access to greater health and safety standards
□ to get access to resources needed for the production process

Explanation:

• "To access cheaper labor": The passage lists accessing cheaper labor as a relocation benefit, so this is a valid reason.
• "To get a higher tax rate": The company negotiated a reduced tax rate, so seeking a higher tax rate is incorrect.
• "To guarantee employees access to greater health and safety standards": The passage doesn't mention health and safety standards as a reason, and relocating to a developing country like Madagascar is less likely for this purpose.
• "To get access to resources needed for the production process": The passage states the company moved to Madagascar to be closer to resources (agricultural products important to it), so this is valid.

Answer:

• To access cheaper labor
• To get access to resources needed for the production process