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The gain of an almost free resource should have aided firm productivit y and business fundamentals but instead of that, the market share has fallen over the years, suggesting a case of which phenomenon of the economy?
  • a)
    Korean disease
  • b)
    Dutch disease
  • c)
    Cronyism disease
  • d)
    English disease
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The gain of an almost free resource should have aided firm productivit...
Option B is correct: Dutch disease refers to the phenomenon wherein countries that are rich in natural resources witness uneven growth across sectors. According to the thesis, when resource-rich countries export their resources to the rest of the world, it causes the exchange rate of their currency to appreciate significantly; this, in turn, affects other sectors in the country by discouraging their exports while encouraging the import of cheaper alternatives. The term was coined by The Economist in 1977 to describe the decline of the manufacturing industry in the Netherlands. The idea, however, was first proposed by economists Peter Neary and Max Corden in a paper published in 1982.
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The gain of an almost free resource should have aided firm productivit y and business fundamentals but instead of that, the market share has fallen over the years, suggesting a case of which phenomenon of the economy?a)Korean diseaseb)Dutch diseasec)Cronyism diseased)English diseaseCorrect answer is option 'B'. Can you explain this answer?
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