3. a) Explain why the commodity terms of trade can be expected to decline over time for developing nations.
b) the commodity terms of trade fell while the income terms of trade increased. Explain how this could happen due to technical change in the export sector.
c) Explain how an increasing supply of labor could cause a decline in the commodity terms of trade, but an increase in the income terms of trade.d) Is a nation necessarily better off if the commodity terms of trade fall while the income terms of trade increase?4. a) What has been the long-run experience of countries that have pursued ISI?
b) Salvatore mentions that ISI is not a feasible long-run policy for development and that export-oriented industrialization might be appropriate. What's a possible justification for this view? Consider simple comparative advantage.
5. a) In what ways can international trade contribute to genuine economic development?
b) Under what circumstances might international trade create problems for developing countries?
6. Large inflows of capital to developing countries in the 1970s and early 1980s, although instrumental in financing growth, eventually led to a foreign debt problem for many countries due to slowly growing exports, low export prices, and high interest rates.
To avoid default, many developing countries used the services of the International Monetary Fund (IMF) to help renegotiate repayment of interest and debt. In return, these countries accepted austerity measures imposed by the IMF, which included reductions in imports, inflation, wages, and domestic public programs.
Why might the IMF impose such measures, and why might these measures be viewed as overly harsh?
7.a) Has globalization reached all nations to a similar extent?
b) is the cause of poverty in the poorest nations due to globalization?
c) How has recent globalization affected the very poor?