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- Positively: When sale prices of the commodity rises a country receives a lot of revenue and can develop other sectors of the economy, can import those goods it is not able to produce cheaply locally, it can lead to specialization as the country concentrates on what it can produce best and cheaply. It can lead to industrialization and create employment opportunities to many.
- Negatively: When world market prices fall, over-reliance can lead to depletion of foreign exchange, inability to import, inability to develop other sectors of the economy and can lead to unemployment among others.
maurice.mutuku answered the question on August 15, 2019 at 11:06
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