ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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By decreasing the reliance on Fair Trade schemes
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Using natural resources to increase exports
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By decreasing tariff revenue
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By encouraging the import of primary goods
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Detailed explanation-1: -Natural resources provide essential raw materials and other commodities, and are an important source of income and jobs. They also support the provision of ecosystem services necessary to develop human and social capital.
Detailed explanation-2: -Natural resources have a double-edge effect on economic growth, in that the intensity of its use raises output, but increases its depletion rate. Natural resource is a key input in the production process that stimulates economic growth.
Detailed explanation-3: -Commercial natural resources can be important sources of profit and foreign exchange. Rents on non-renewable, renewable, and potentially sustainable resources can be used to finance investments in other forms of wealth.
Detailed explanation-4: -Therefore, if you produce primary products, you may see lower rates of economic growth than countries who produce manufacturing goods – which are more income elastic. The Prebisch-Singer hypothesis suggests that countries who concentrate on primary products are vulnerable to a declining terms of trade.