Are the terms of trade a problem, Business Economics

Are the terms of trade (ToT) a problem?

Problem: The terms of trade (ToT) of a country fall when its import prices rise quicker than the price of its exports. Less Developed Country face a continuous deterioration of their ToT therefore a larger volume of exports has to be sold to finance a specified amount of imports.

Implications: Less Developed Countries are along with a comparative advantage within primary product are facing long term decline into export earnings through a specified volume of exports a trend made worse by increasing capacity through growth as well as the low PED for agricultural goods.

Posted Date: 8/29/2013 7:14:31 AM | Location : United States







Related Discussions:- Are the terms of trade a problem, Assignment Help, Ask Question on Are the terms of trade a problem, Get Answer, Expert's Help, Are the terms of trade a problem Discussions

Write discussion on Are the terms of trade a problem
Your posts are moderated
Related Questions
Net exports normally decrease with the effect when aggregate output decline. When a concretionary fiscal policy is implemented net exports will go up . When government maintain the

how get atmosphere pollution and its solution

QUESTION (a) Explain the Law of demand and the factors affecting demand for a product or service. (b) Explain and illustrate diagrammatically how the market demand for a pro

What are the restrictions of Lewis? The restrictions of Lewis: • Assumes complete employment in urban regions. Evidence recommend otherwise • Raised profits may be inves

1. Consider the market where there is product differentiation with two firms. The firms are choosing prices p1 and p2 and have demands given by q1 = 40 - 0.5 p1 + p2 q2 = 60


International oil has been described as the lifeblood of industrial society. A National Security Council paper in 1953 noted that American Based multinational oil companies were in

Explain the state intervention approaches for promoting development. State intervention can result within: • Large bureaucracies staffed through friends and relatives of the

helloo?

Are weaknesses of financial markets a problem? Problem: a. Potential entrepreneurs require funds to finance new projects. Financial institutions, as like banks, are middle