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Question 2

The Prebisch-Singer hypothesis states that primary commodity-dependent developing nations face a long-run structural decline in their terms of trade. Which of the following relationships between the income elasticity of demand for primary commodities (YEDpYED_pYEDp​) and manufactured goods (YEDmYED_mYEDm​) provides the theoretical foundation for this hypothesis?

A

0<YEDp<10 < YED_p < 10<YEDp​<1 and YEDm>1YED_m > 1YEDm​>1

B

YEDp>1YED_p > 1YEDp​>1 and 0<YEDm<10 < YED_m < 10<YEDm​<1

C

YEDp<0YED_p < 0YEDp​<0 and YEDm>1YED_m > 1YEDm​>1

D

YEDp>1YED_p > 1YEDp​>1 and YEDm>1YED_m > 1YEDm​>1

Markscheme

Development Questions

  1. A Level
  2. /Economics
  3. /Development

29 exam-style questions on OCR A Level Economics Development. Each one has a worked solution and a mark scheme showing where the marks go.

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