Which trade theory suggests that a newly produced good,once exported,could ultimately end up being imported as the technology is transferred to lower- cost nations?
A) Factor endowment theory
B) Product life cycle theory
C) Overlapping demand theory
D) Comparative advantage theory

Question

Quizplus · Accepted Answer

The Product life cycle theory suggests that a newly produced good, once exported, could ultimately end up being imported as the technology is transferred to lower-cost nations. This is because as the product becomes mature and demand for it stabilizes, production shifts to countries with lower costs of production. Eventually, those countries may become more efficient at producing the product, and begin to export it to the country where it was originally created, leading to an import.

Which Trade Theory Suggests That a Newly Produced Good,once Exported,could