In the Px = export price index, Pm = import price index, Qx = export quantity index,and Qm = import quantity index. Developing countries tend to maintain that their commodity term of trade have declined over the long run suggesting that _________ has declined?

Related Mcqs:

1. Suppose that the world price of tin is above the target (ceiling) price that is defined by an international commodity agreement. To move the world price toward the target price, a buffer stock agreement would require its buffer stock manager to ____ tin and an export quota agreement would require that member countries _________ their export of tin?

   A. purchase; decrease
   B. purchase; increase
   C. sell; increase
   D. sell; decrease

2. An export quota agreement to stabilize the price of bauxite tends to be more successful when the member producer countries as a percentage of the world’s producer countries is __________ and the _________ it is for the member producer countries to store/stock pile bauxite?

   A. relatively small; more difficult
   B. relatively small; easier
   C. relatively large; more difficult
   D. relatively large; easier

3. Similar to import tariffs import quotas tend to result in ?

   A. higher prices and reduced imports
   B. increased government revenue
   C. increased consumer surplus
   D. decrease producer surplus

4. Assume that global recession causes the quantity of tin demanded to decrease by 4 million pounds at each price To maintain the price of tin at the target price you would ?

   A. sell 4 million pounds of tin
   B. sell 8 million pounds of tin
   C. buy 4 million pounds of tin
   D. buy 8 million pounds of tin

5. Instead, assume that global economic expansion causes the quantity of tin demanded to increase by 4 million pounds at each price To maintain price of tin at the target price you would ?

   A. sell 4 million pounds of tin
   B. sell 8 million pounds of tin
   C. buy 4 million pounds of tin
   D. buy 8 million pounds of tin

6. When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

   A. trade diversion
   B. trade channeling
   C. trade creation and trade diversion
   D. trade creation

7. Concerning the hypothesis that there has occurred a long run deterioration in the developing countries terms of trade empirical studies provide ?

   A. mixed evidence that does not substantiate the deterioration hypothesis
   B. overwhelming support for the deterioration hypothesis
   C. overwhelming opposition to the deterioration hypothesis
   D. None of the above

8. Developing countries that emphasize the production of raw materials or agricultural goods may realize a long-run deterioration in the international terms of trade because of ?

   A. relatively low import tariffs maintained by advanced countries
   B. highly elastic demand for these products in advanced countries
   C. declines in the supplies of these products on world markets
   D. sluggish demand for these products in advanced countries

9. Developing countries that concentrate production in agricultural products or raw materials may face a long-run decline in their international terms of trade because of ?

   A. inelastic demand for these products in advanced countries
   B. large increases in the supplies of these products on world markets because of export expansion policies
   C. sluggish demand for these products in advanced countries
   D. All of the above

10. Tariff levels in advanced countries tend to be __________ tariff levels in developing countries?

    A. higher than
    B. equal to
    C. lower than
    D. there is no general pattern