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Suppose Country a Relies on Exports of Two Primary Products

Question 60

Essay

Suppose country A relies on exports of two primary products, sugar cane and rubber.
A) According to the predictions of Engel's law, what will happen to the terms of trade of country A in the long run?
B) If you are to provide economic policy advice to this nation's government, what advice would you give? In your answer, be sure to explain the reasons behind your advice

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Engel’s law states that in the long run,...

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