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Olin [163]
2 years ago
9

5. Why is it a problem for South American countries to depend on a few exports for

History
1 answer:
Phoenix [80]2 years ago
3 0

Answer: Adversely affected by changing trends

Explanation:

Every country needs to have multiple diversified exports to be able to combat changing trends in trade as a result of economic trends.

South America exports mostly primary commodities such as foodstuff, oil and other raw materials. If economic conditions lead to the prices of these goods falling then South American economies would face hardships as income earned from exports will fall drastically.

2020 for instance saw the prices of oil fall to very low prices as there weren't enough vessels using fuel due to the various lockdowns around the world. This heavily affected countries reliant on oil exports in South America such as Venezuela and Bolivia.

In short, depending on few exports can be damaging to the economy because economic trends can lead to a downturn in fortune. It is best to have a diversified export portfolio.

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