Why might export pessimism be wrong?
What will be an ideal response?
First, statistical studies do not support the idea that primary commodities necessarily fall over time. Secondly, even though people may spend a smaller share of their income on primary commodities, the terms of trade will not necessarily fall, because productivity increases in manufacturing can overwhelm increases in demand and push down the real prices of manufactured goods relative to the price of primary products.
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If inflation is higher in the home market, what is expected to happen to the real value of the home currency as time passes?
What will be an ideal response?
If the quantity of good A (QA) is plotted along the horizontal axis, the quantity of good B (QB) is plotted along the vertical axis, the price of good A is PA, the price of good B is PB and the consumer's income is I, then the slope of the consumer's
budget constraint is ________. A) -QA/QB B) -QB/QA C) -PA/PB D) -PB/PA E) I/PA or I/PB
If the income elasticity of demand for a good is 0.5, then
a. it is a normal good, and its demand curve will shift to the left if buyers' incomes increase b. it is a normal good, and its demand curve will shift to the right if buyers' incomes increase c. it is an inferior good, and its demand curve will shift to the right if buyers' incomes increase d. it is an inferior good, and its demand curve will shift to the left if buyers' incomes increase e. there is insufficient information to determine whether the good is normal or inferior
Edward is an unmarried man with no children. He loses his job as the manager of a company. After three years of job searching, Edward manages to finally get a job in a small company. Edward's three years of unemployment are most likely to result in _____
a. a loss of lifetime earnings for Edward b. a loss of human capital for the broader society c. the deterioration of health for the broader society d. a loss of social cohesion for the broader society