According to World Bank, nations with per capita income of $15,000 can be classi

Question

According to World Bank, nations with per capita income of $15,000 can be classified as

(a) low-income economies

(b) lower-middle income economies

(c) upper-middle income economies

(d) high-income economies

Which one of the following is NOT a characteristic of developing nations?

(a) Unequal income distribution

(b) More agrarian economies

(c) Lower ratio of exports to GDPs compared advanced nations.

(d) Higher infant mortality

A characteristic of a primary product is that the supply and demand are relatively price

(a) elastic

(b) unit elastic

(c) inelastic

(d) perfectly elastic

Developing nations’ terms of trade (TOT) are worsening over time because

(a) relative prices of primary exports to imports are unstable and falling.

(b) relative prices of primary exports to imports are stable and falling

(c) the prices of their manufactured import products are falling over time.

(d) the prices of their primary export product are rising over time.

Most developing countries acquire necessary primary products by importing them from advanced nations.

True or false

Explanation / Answer

ANS - 1

High Income Economies

ANS - 2

Higher Infant Mortality - This is not the very appropriate reason for under devloped nations or devloping nations.

ANS - 3

INELASTIC - Primary goods are kept in the category of Inelasticity as they are RAW materials.

ANS - 4

Terms of trade is essentially a measure of changing price levels of country's exports and imports over specific tme period. However, declining terms of trade indicate that import prices are rising more quickly, and thus the country must export a larger quantity of goods in order to import the same amount as before.

(a) relative prices of primary exports to imports are unstable and falling.

ANS - 5

YES , they do becasue, sometimes they are lacking with required technology to produce raw material required for specific work in their own country. So they opt the method of Importation from another country.

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