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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Which of the following goods is NOT a likely component of the Consumer Price Index?
A) Hamburger B) 87 octane gasoline C) Structural steel beams D) Movie tickets
Refer to the following graph.
If this country is producing between point P and G, it will gain by ________ its production of good A and importing more ________.
A. decreasing; good B B. decreasing; good A C. increasing; good A D. increasing; good B