Name 2 theories of international trade which claim that the government has an important role to play in international trade.

3. Name 2 theories of international trade which claim that the government has an important role to play in international trade. Explain the role of the government in these theories. Why do we need the government to play this role?
• Product life cycle theory
The theory states that a product has three core stages: new product, maturing, and standardized stage. Accordingly, the theory states that a product has to be produced in its home country at its initial stage. This is the country where the product was first discovered. Thus, it is an important theory that explains the role of government in supporting innovation. For example, the American industries are known as the major product producers because the government supports innovative moves