Match the word to the following definition:A term for a country that has an economy dependent solely on revenue from exporting a single product or commodity.
Question
Match the word to the following definition:
A term for a country that has an economy dependent solely on revenue from exporting a single product or commodity.
Solution
The term that matches the definition provided is "monoculture economy." A monoculture economy refers to a nation's economic structure that is heavily reliant on a single product or commodity for its revenue, often leading to vulnerabilities in case of market fluctuations or changes in demand for that particular product.
This type of economy is particularly common in smaller countries rich in natural resources, such as oil or agricultural products. If the price of the commodity falls, the entire economy can suffer significantly, creating issues like unemployment, inflation, and fiscal deficits. Diversification of the economy is often suggested as a strategy to mitigate these risks and promote stability and growth.
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