Exam 7: Trade Policies for the Developing Nations

During the late 1980s and early 1990s,China dismantled much of its centrally-planned economy and permitted free enterprise to replace it.

Which of the following could partially explain why the terms of trade of developing countries might deteriorate over time?

Export-led growth tends to:

Import substitution policies make use of:

The developing nations are most of those in Africa,Asia,North America,and Western Europe.

Import-substitution policies are supported by the fact that many developing countries have small domestic markets and thus their producers enjoy the benefits of diseconomies of small-scale production.

When cartel members agree to restrict output to increase the price of their product,a single member of the cartel has an economic incentive to violate the agreement by increasing its output so as to increase profits.

Among the economic problems facing developing countries have been low dependence on primary-product exports,unstable export markets,and worsening terms of trade.

To help developing nations strengthen their international competitiveness,many industrial nations have granted nonreciprocal tariff reductions to developing nations under the:

The United Nation Conference on Trade and Development in 1964 was successful in convincing developing countries to switch from export-led industrialization to import-substitution industrialization.

For developing countries,a key factor underlying the instability of primary-product prices and export receipts is the high price elasticity of demand for products such as tin and copper.

One factor that has prevented the formation of cartels for producers of commodities is that:

Concerning the hypothesis that there has occurred a long-run deterioration in the developing countries' terms of trade,empirical studies provide:

Which of the following situations reduces the likelihood of successful operation of a cartel?

To help developing countries expand their industrial base,some industrial countries have reduced tariffs on designated manufactured imports from developing countries below the levels applied to imports from industrial countries.This scheme is referred to as:

Which trade strategy have developing countries used to replace commodity exports with exports such as processed primary products,semi-manufacturers,and manufacturers?

Rather than conduct massive stabilization operations,buffer stock officials will periodically revise target prices should they move out of line with long-term price trends.

Export-led growth industrialization suffers a major problem: it depends on the willingness and ability of foreign nations to absorb the goods exported by the country pursuing such a policy.

Concerning the price elasticities of supply and demand for commodities,empirical estimates suggest that most commodities have:

Assuming identical cost and demand curves,OPEC as a cartel will,in comparison to a competitive industry: