A factory in Country X purchases raw materials from Country Y to make its product.Profits will be reinvested in the factory,increasing production and profits in Country X.Country Y will never make enough profits from the sale of materials to build its own factory.What theory could be used to explain the relationship that has developed between countries X and Y?
A) capitalist
B) modernization
C) dependency
D) underdevelopment

Question

Quizplus · Accepted Answer

The situation described fits the concept of dependency theory, which argues that less developed countries are dependent on more developed countries for economic growth and prosperity. Country X is able to use its profits to reinvest in its own production and continue to grow, while Country Y is perpetually stuck in a cycle of selling raw materials without the ability to develop its own industries.

A Factory in Country X Purchases Raw Materials from Country