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Which is a problem caused by having an export economy? A. They rely too much on import tariffs. B. African businesses have to compete with each other. C. Export economies lead to quick industrialization. D. It causes a reliance on world market prices.

Ask by Gough Hall. in the United States
Feb 26,2025

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Having an export economy causes a reliance on world market prices.

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To determine which option represents a problem caused by having an export economy, let's analyze each choice: A. **They rely too much on import tariffs.** This statement does not directly relate to the problems of an export economy. Export economies focus on selling goods abroad rather than relying on tariffs. B. **African businesses have to compete with each other.** While competition can be a challenge, this is not a specific problem caused by an export economy. It is more about the internal market dynamics. C. **Export economies lead to quick industrialization.** This is generally seen as a benefit rather than a problem. Quick industrialization can be a positive outcome of an export economy. D. **It causes a reliance on world market prices.** This is a significant problem associated with export economies. When a country relies heavily on exports, it becomes vulnerable to fluctuations in global market prices, which can affect its economy negatively. Based on this analysis, the correct answer is: **D. It causes a reliance on world market prices.**

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Export economies can create a dependence on the fluctuations of world market prices, making them vulnerable to external shocks and downturns, which can impact economic stability. For instance, if the global demand for a key export drops, it can lead to significant financial challenges for a country reliant on that product. Additionally, businesses in these economies might prioritize exporting over local needs, potentially neglecting their domestic markets. This can stifle local industry growth and entrepreneurship, leading to an imbalance within the economy where local needs are overlooked in favor of international trade.

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