Practice Questions on Commodity Dependence for the APHG Exam

📚 Topic Summary

Commodity dependence occurs when a country's economy relies heavily on the production and export of one or a few primary commodities. This dependence can make the country vulnerable to price fluctuations in the global market. For example, if a country relies mainly on exporting coffee, a sudden drop in coffee prices due to oversupply or decreased demand can significantly impact its economy.

Understanding commodity dependence is crucial because it links economic activities to broader geographic patterns of resource distribution, trade, and development. Recognizing how commodity dependence affects a country's development helps in comprehending global economic inequalities.

🌍 Part A: Vocabulary

Match the following terms with their definitions:

1. Commodity Dependence
2. Price Volatility
3. Diversification
4. Resource Curse
5. Terms of Trade

Definitions:

1. The ratio of a country's export prices to its import prices.
2. The tendency for countries rich in natural resources to experience slower economic growth.
3. The state of an economy being highly reliant on the production and export of a single or a few commodities.
4. The process of shifting an economy away from a single commodity towards a wider range of products and industries.
5. The degree to which a price changes over time.

📝 Part B: Fill in the Blanks

Commodity ___________ can lead to economic instability due to ___________ in global commodity prices. Countries can reduce their dependence by pursuing economic ___________. However, the ___________ can hinder development, leading to ___________. Improving ___________ is also crucial for economic resilience.

🤔 Part C: Critical Thinking

Explain how commodity dependence can affect a country's ability to invest in education and healthcare, and suggest two strategies the country could use to mitigate these negative impacts.