Advocates of dependency theory assert that
A) poor countries are hampered from participating in free trade because of a lack of transportation infrastructure.
B) the high rate of poverty in poor countries is attributed to underdeveloped markets and the lack of property rights.
C) trade based on comparative advantage benefits developed countries at the expense of poor countries.
D) the key reason why poor nations have been slow to industrialize is because of persistent misallocation of resources.

Question

Quizplus · Accepted Answer

Advocates of dependency theory argue that trade based on comparative advantage benefits developed countries at the expense of poor countries. This is because poor countries are often limited to producing and exporting raw materials, while developed countries have the technology and resources to produce higher value-added products. As a result, poor countries are dependent on developed countries for manufactured goods, which make up a larger share of their imports than their exports. This can lead to a cycle of poverty and underdevelopment for poor countries.

Advocates of Dependency Theory Assert That