The PrebischSinger hypothesis concludes that:
A)due to unfair trading practices, labor in developing countries is exploited.
B)developing countries experience a longrun decline in their terms of trade, as the demand for primary products in higherincome countries
Declines relative to their demand for manufactured goods.
C)OPEC has been responsible for a slowdown in the world's standard of living.
D)technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade.

Question

The Prebisch­Singer hypothesis concludes that:
A)due to unfair trading practices, labor in developing countries is exploited.
B)developing countries experience a long­run decline in their terms of trade, as the demand for primary products in higher­income countries
Declines relative to their demand for manufactured goods.
C)OPEC has been responsible for a slowdown in the world's standard of living.
D)technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade.

Quizplus · Accepted Answer

The Prebisch-Singer hypothesis suggests that over the long run, developing countries experience a decline in their terms of trade (the price ratio of their exports to their imports) since the demand for primary products declines relative to the demand for manufactured goods. This hypothesis challenges the traditional view that free trade benefits all countries equally and highlights the structural difficulties faced by developing countries in generating sustained economic growth.

The Prebisch­Singer Hypothesis Concludes That

The PrebischSinger Hypothesis Concludes That