Question

Developed countries export industrial products, underdeveloped countries export agricultural products.

Explain the results of this situation by showing the example countries.

Answer 1

Developing countries

While developing-country economies are usually not as competitive as industrial-country economies, developing-country produces certain products and services in quantities that they can not use or consume at home. It is called surplus production. example, some developing countries produce huge amounts of agricultural products, such as cocoa in Cote d'Ivoire and coffee in Latin America, which are not large enough for their own populations to eat. Many developing countries produce quantities of industrially important minerals, such as oil or iron ore, which are too small or not yet developed to use for their own economies

Exports also serve the purpose of earning foreign currency for many developing countries, through which they can buy vital imports — international goods that they can not produce, mine, or expand at home. In other words, developed countries sell exports in part, so they can import. Exporting goods and services may also further advance the domestic economies of developed nations.

Developed countries

Exports are often more than just an outlet for developing countries to have "excess" demand. Since their economies are more complex, developed countries prefer to: export a far wider product selection than developing countries do; and export a greater proportion of their overall goods and services production.
Sales from exports help sustain high rates of employment for US and many other developed countries.

In 2012, the United States had an estimated 4,926 million people in employment who were engaged either directly or indirectly in the manufacture of products or services sold to other countries. Exports have become important for economic stability and growth for the USA and other countries with highly competitive, diverse economies.

As the 2007 economic crisis began, several countries were tightening their (economic) belts. Productive countries have seen a decline in export revenues and significant job losses. The deficit in goods and services dropped $8.2 billion in 2012, with exports rising $6 billion, or 3.2 per cent. The reasons for this deficit include a record number of exports in 2012, a decrease in import oil costs and a decline in import goods demand. However, China's trade deficit continued to expand as car imports outstripped exports