Which of the following is true of product cycle hypothesis?

Question

Quizplus · Accepted Answer

The product cycle hypothesis explains how an initial exporter of a good ends up importing the good from other countries. It suggests that as the country reaches maturity in producing the good, other countries begin producing it as well, and eventually, it no longer makes economic sense for the initial exporter to continue producing it. The hypothesis does not completely specialize countries in the production of the good or ignore the importance of research and development, and it does not assume that demand for various commodities in countries does not change over time.

Which of the Following Is True of Product Cycle Hypothesis