Balance of payment in international trade does not favour developing countries because?

A. of their low bargaining power
B. most of their exports are raw materials
C. their currencies are very weak
D. of the low demand of their exports

Correct Answer:

Option B – most of their exports are raw materials

Explanation

The answer is B Most of their export are raw materials, Developing countries often depend on the developed countries to produce their raw material into finished product hence they tend to pay more when raw materials are processed and imported back. Bargaining power has little or no effect on international trade as most international deals with exchange of product. African countries most cases request for manufactured goods they needed rather than been paid