Many American companies that previously manufactured goods and services at home have increasingly relied on manufacturing facilities in China over the last twenty years. However, with the rise in diesel fuel prices this has increased the cost to domestic firms of importing these manufactured products. Some companies are discovering that the transportation costs are so great that it is tipping the balance in favor of making it more economical to build manufacturing facilities here in the United States. If many other firms follow suit what impact will this have on Gross Domestic Product?

Question

Quizplus · Accepted Answer

The Answer of Many American companies that previously manufactured goods and services at home have increasingly relied on manufacturing facilities in China over the last twenty years. However, with the rise in diesel fuel prices this has increased the cost to domestic firms of importing these manufactured products. Some companies are discovering that the transportation costs are so great that it is tipping the balance in favor of making it more economical to build manufacturing facilities here in the United States. If many other firms follow suit what impact will this have on Gross Domestic Product?

Many American Companies That Previously Manufactured Goods and Services at Home