Which term best describes a country’s heavy reliance on exporting agricultural and mineral commodities?

• A. Economic diversification
• B. Commodity dependence
• C. Import substitution
• D. Export-oriented growth

Answer: (B)

Commodity dependence describes an economy that relies heavily on exporting a narrow set of primary goods, such as agricultural and mineral commodities. This pattern means a large share of national income, government revenue, and employment comes from a few export items, making the country especially vulnerable to price swings and changes in demand in those markets. That vulnerability is the core reason this term fits best—the economy’s fate hinges on a limited commodity mix rather than a diversified export base.

Economic diversification would reduce this risk by broadening the range of exports and economic activities. Import substitution focuses on producing goods domestically to replace imports, not on export reliance. Export-oriented growth involves promoting exports in general, but it doesn’t necessarily imply dependence on a small set of commodities.