to achieve economic growth.
Level
Marks
0
The work does not meet a standard described by the descriptors below.
1
Limited understanding.
A valid but vaguely outlined consequence
2
Clear understanding.
A valid clearly outlined consequence
Negative consequences may include:
- Prices of agricultural products fluctuate and thus lead to volatility of export earnings and national income.
- Income elasticity of demand for many such farm exports is often low so as incomes in advanced economies grow, demand for these exports grows more slowly.
- The terms of trade for the economy could deteriorate, so the country needs to export a greater volume in order to finance required imports.
- Specialization in a narrow range of agricultural products implies that the economy does not diversify into higher value-added manufactured goods / becomes vulnerable to external demand shocks or supply chain problems or to trade protection policies imposed by foreign governments.
- Any other valid negative consequence.
