What term describes an economy that relies heavily on exports of agricultural and mineral raw materials?

• A. Commodity dependence
• B. Trade balance stability
• C. Economic diversification
• D. Resource productivity

Answer: (A)

Commodity dependence describes an economy that relies heavily on exporting agricultural and mineral raw materials. This focus means growth and government revenue are tied to the fortunes of a narrow set of primary commodities, which can be volatile due to fluctuating global prices and demand. Such dependence often leaves countries vulnerable to price swings, terms-of-trade changes, and slower development in other sectors, making diversification more challenging.

Other terms describe different ideas: trade balance stability relates to the ongoing balance between exports and imports rather than the composition of what’s exported; economic diversification is about broadening the economic base away from a narrow set of products; and resource productivity concerns how efficiently resources are used, not the structure of a country’s exports.