Author Question: Provide a concise statement about the relationship between a developing country's emphasis on the ... (Read 128 times)

nummyann · **on:** Jun 30, 2018

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.

Question 2

Which of the following is not an upper-middle income country?

a. Brazil
b. South Africa
c. Pakistan
d. Argentina

britb2u · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

(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.

Answer to Question 2

C