Question

According to the product life-cycle theory, the locus of global production initially switches from the United States to other advanced nations and then from those nations to developing countries. Which of the following is most likely to be a consequence of these trends? A. U.S. imports become less capital-intensive than U.S. exports.B. The pattern of international trade is affected by differences in factor endowments rather C. Over time, the United States switches from being an exporter of a product to an importer of D. The wage rates in the United States decrease.E. Developing nations fail to upgrade their skill levels to compete with advanced countries

Answer 1

Answer:

The correct answer is letter "C": Over time, the United States switches from being an exporter of a product to an importer of the product.

Explanation:

The life-cycle theory proposes that the United States boosted worldwide economic trade exporting their products. At first, the products were delivered to other world developed countries. Over time, those developed countries started to study American products to become manufacturers. This implies competition so to spend fewer costs, the developed countries took their operations to developing nations.

After some time, it is believed that those developing countries are likely to become manufacturers as well at even cheaper costs provoking that the United States begin to import products from the developing nations.