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Why is the relation between raw materials and manufactured goods central in unequal exchange theory?

Answer and explanation

Correct answer: Because value inequality can maintain dependence of developing countries

The direct answer is A: the raw-material/manufactured-goods relationship is central because unequal values can keep developing countries dependent. Raw materials are often exported with limited processing, while manufactured goods include processing, technology, skills, and greater added value. Step by step: a country exports a primary product; its price may be unstable and relatively low; it imports machines or finished products whose prices and value are higher; the country may therefore remain dependent on foreign industries, technology, and markets. A is correct because it connects value inequality with dependence. B is wrong because the two forms of goods do not always have equal value. C is wrong because raw materials are widely exported. D is wrong because manufactured goods are a central part of trade. Exam cue: compare export composition, prices, and added value.

Related tags

Unequal-ExchangeRaw-MaterialsDependency

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