Podcast
Questions and Answers
What does the Prebisch-Singer Hypothesis suggest about primary commodity export prices over time?
What does the Prebisch-Singer Hypothesis suggest about primary commodity export prices over time?
- They increase due to high income and price elasticities of demand.
- They experience sharp fluctuations depending on the country's political stability.
- They remain constant regardless of economic factors.
- They fall due to low income and price elasticities of demand. (correct)
How does a falling terms of trade affect a country's ability to purchase the same level of imported goods?
How does a falling terms of trade affect a country's ability to purchase the same level of imported goods?
- It leads to an increase in foreign exchange reserves.
- It has no impact on the country's import capacity.
- It requires selling more exports to maintain the same purchasing power. (correct)
- It encourages reduced dependence on imports.
What determines a country's total export earnings?
What determines a country's total export earnings?
- Total volume of exports sold (correct)
- Number of trading partners
- Variability in exchange rates
- Total volume of imports sold
In the traditional theory of international trade, what does comparative advantage refer to?
In the traditional theory of international trade, what does comparative advantage refer to?
What is the main concern highlighted by Prebisch and Singer regarding developing countries' reliance on primary exports?
What is the main concern highlighted by Prebisch and Singer regarding developing countries' reliance on primary exports?
According to Ricardo and Mill's neoclassical model, what does international specialization in trade depend on?
According to Ricardo and Mill's neoclassical model, what does international specialization in trade depend on?
What happens to the equilibrium home price and quantity in a closed economy without international trade?
What happens to the equilibrium home price and quantity in a closed economy without international trade?
What does a small country opening its economy to world trade face?
What does a small country opening its economy to world trade face?
Who benefits from the lower price of imports in an open economy?
Who benefits from the lower price of imports in an open economy?
What happens to the quantity demanded when the world price decreases to P2?
What happens to the quantity demanded when the world price decreases to P2?
How does the quantity supplied by domestic producers change when the world price decreases to P2?
How does the quantity supplied by domestic producers change when the world price decreases to P2?
What does the steeper slope of the world price ratio 𝑃ഥ𝑎൘ for Less Developed World indicate?
What does the steeper slope of the world price ratio 𝑃ഥ𝑎൘ for Less Developed World indicate?
What does the difference between what domestic producers supply at a lower world price and what consumers want represent?
What does the difference between what domestic producers supply at a lower world price and what consumers want represent?
What impact does the world price of agricultural goods being higher than Less Developed World’s domestic price ratio have on resource allocation?
What impact does the world price of agricultural goods being higher than Less Developed World’s domestic price ratio have on resource allocation?
How does the relative difference in costs of production and prices give rise to profitable trade?
How does the relative difference in costs of production and prices give rise to profitable trade?
In terms of the classical labor cost model, where does the international free-trade price ratio settle?
In terms of the classical labor cost model, where does the international free-trade price ratio settle?
How does the steeper slope of Less Developed World's world price ratio impact its resource allocation?
How does the steeper slope of Less Developed World's world price ratio impact its resource allocation?
What is the significance of the lines 𝑃ഥ𝑎൘ denoting the common world 𝑃𝑚 price ratio in both graphs?
What is the significance of the lines 𝑃ഥ𝑎൘ denoting the common world 𝑃𝑚 price ratio in both graphs?
Which of the following is a key benefit of economic integration between countries?
Which of the following is a key benefit of economic integration between countries?
What is the primary reason the Doha Development Round of trade negotiations, which began in 2001, remained stalled through 2014 according to the text?
What is the primary reason the Doha Development Round of trade negotiations, which began in 2001, remained stalled through 2014 according to the text?
Which of the following regional trading blocs is NOT mentioned in the text?
Which of the following regional trading blocs is NOT mentioned in the text?
What is a key unresolved question regarding regional trading blocs?
What is a key unresolved question regarding regional trading blocs?
What does the text state is a key reason for the persistence of trade barriers, even after 8 rounds of trade liberalization over 50 years?
What does the text state is a key reason for the persistence of trade barriers, even after 8 rounds of trade liberalization over 50 years?
Which of the following is NOT identified in the text as a key impact of the economic and commercial policies of developed countries on developing countries?
Which of the following is NOT identified in the text as a key impact of the economic and commercial policies of developed countries on developing countries?
Which of the following is NOT a result of free trade between regions?
Which of the following is NOT a result of free trade between regions?
According to the neoclassical model of international trade, which of the following statements is true?
According to the neoclassical model of international trade, which of the following statements is true?
If two countries have identical technologies of production, what will tend to happen to their domestic product price ratios and factor prices according to the text?
If two countries have identical technologies of production, what will tend to happen to their domestic product price ratios and factor prices according to the text?
What will happen to wage rates in labor-abundant Less Developed Countries as a result of free trade?
What will happen to wage rates in labor-abundant Less Developed Countries as a result of free trade?
Based on the information provided, which of the following statements about the neoclassical model of international trade is correct?
Based on the information provided, which of the following statements about the neoclassical model of international trade is correct?
According to the graph in Figure 5.1, what do points C and C' represent?
According to the graph in Figure 5.1, what do points C and C' represent?
