Final answer:
The statement regarding environmental challenges of global sourcing is true, as these challenges can lead to substantial long-term costs and volatile inflation, particularly in smaller economies. Increased production costs due to environmental regulations can also affect businesses' ability to compete globally. Moreover, the balance of trade and interrelated global issues highlight the complexity of managing international trade and environmental concerns.
Step-by-step explanation:
The statement "Environmental challenges of global sourcing include currency fluctuations, tariffs and other trade barriers, and adverse macroeconomic events" is true. Global sourcing can indeed bring about various environmental challenges that create substantial long-term costs for businesses, particularly if these challenges distract them from achieving real productivity gains. For instance, smaller economies may face more volatile inflation due to the international movements of capital and goods. Furthermore, various aspects related to globalization, such as environmental protection regulations, can increase industrial production costs, making it more difficult for companies to compete in the international market.
These issues amplify concerns over the balance of trade, as countries may face job losses, environmental concerns, and unfair labor practices among other challenges. Additionally, as nations become more economically interdependent, problems that were once national can escalate into global crises, necessitating international cooperation to address them. Whether these problems are economic, geographical, or political in nature, they often fall under the scope of economic globalization.