A Factory in Country X Purchases Raw Materials from Country

question 105

Multiple Choice

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 theory
• B) modernization theory
• C) dependency theory
• D) underdevelopment theory

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