Provide a concise statement about the relationship between a developing country's emphasis on the export of traditional commodities and:
(a) export earnings stability; (b) comparative advantage;
(c) terms of trade.
(a) Traditional commodities may tend to experience greater price fluctuations; (b) less developed countries tend to have a comparative advantage in traditional commodities;
(c) terms of trade for traditional commodities may tend to fall over time according to the Prebisch-Singer thesis.
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Positive externalities are created by people when they
A) add to the net real income of society. B) are altruistic or concerned for the welfare of others. C) benefit others without intending to do so. D) increase the general welfare. E) promote the happiness of others.
Which of the following statements is false?
A. The Wilshire 5000 is a stock index that consists of the stocks of about 6,500 firms. B. Instead of buying a mutual fund that consists of various stocks picked by a fund manager you can buy a mutual fund that consists of the stocks that make up a particular stock index. C. The term Sypders stands for "Standard & Poors Direct Receipts." D. When an investor buys Spyders they are said to "buy the market."
If both autonomous imports and autonomous taxes decrease by $100B we expect that equilibrium income will
A) increase by more than $200B. B) decrease by more than $200B. C) increase by $200B. D) remain unchanged.
Which of the following pairs of goods would most likely exhibit a cross price elasticity of 2.2?
a. hamburgers and fries b. peanut butter and jelly c. butter and margarine d. tennis balls and tennis rackets