Question

Country A exports technology, petroleum, and automobiles. Country B makes most of its money exporting steel and steel products. A new metal is
discovered that is more affordable and durable than steel. Most countries stop buying steel and start using the new type of metal.

Which country's economy will experience the most significant negative impact from this change?

A) Country A, because it is a single-resource economy

B) Country B, because it is a single-resource economy

C) Country A, because it is a diversified economy

D) Country B, because it is a diversified economy

Answer 1

Country B will suffer the most. They gain money by exporting metals, and since they are a Single-Resource country, they won’t have anything else to export.