The product life-cycle theory predicts that
A)over time the United States switches from an exporting country of new products to an importing country.
B)over time the United States switches from a comparative advantage in R&D to a service economy.
C)over time the United States education system maintains the country's dominant position in the world economy.
D)none of the above

Question

Quizplus · Accepted Answer

The product life-cycle theory suggests that as a country develops and its products mature, it will shift from being an exporter of new products to an importer of those same products. This is because other countries with lower labor costs can produce the same products more cheaply. This has been observed in the United States, which has shifted from being a major exporter of manufactured goods to a major importer.

The Product Life-Cycle Theory Predicts That