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Developing Countries Often Claim That Their "Commodity Terms of Trade

Question 3

Multiple Choice

Developing countries often claim that their "commodity terms of trade" have fallen over the long run. This means that (with Px = export price index, Pm = import price index, Qx = export quantity index, and Qm = import quantity index) the developing countries think that there has been a decline in their __________.


A) (Pm/Px) .Qm
B) Pm/Px
C) Px/Pm
D) (Px/Pm) .Qx

Correct Answer:

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