Match each Terms of Trade concept or structural analytical framework on the left with its … — JAMB UTME

Match each Terms of Trade concept or structural analytical framework on the left with its precise economic formulation and conceptual interpretation on the right.

Single Factoral Terms of Trade ( $T_s$ )Calculated as $T_c \times Z_x$ , measuring the volume of physical imports obtainable per unit of domestic factor employed in export production.
Income Terms of Trade ( $T_y$ )Calculated as $T_c \times Q_x$ or $\frac{P_x Q_x}{P_m}$ , measuring a nation's total capacity to import based on export revenue.
Gross Barter Terms of Trade ( $T_g$ )Calculated as $\left(\frac{Q_m}{Q_x}\right) \times 100$ , where an increase indicates a greater physical volume of imports obtained per unit of exports.
Prebisch-Singer Hypothesis on DeteriorationPostulates long-run decline in primary exporters' TOT due to low income elasticity of demand for primary products compared to manufactured imports.

Answer

Single Factoral Terms of Trade matches with

T_c \times Z_x

; Income Terms of Trade matches with

T_c \times Q_x

; Gross Barter Terms of Trade matches with

\left(\frac{Q_m}{Q_x}\right) \times 100

; and Prebisch-Singer Hypothesis matches with the long-run structural decline in primary commodity terms of trade due to low income elasticity of demand.

Each concept correctly aligns with its unique formula and analytical purpose: Single Factoral includes productivity (

Z_x

), Income incorporates export volume (

Q_x

) to determine capacity to import, Gross Barter compares physical import-to-export quantities (

Q_m / Q_x

), and Prebisch-Singer explains long-term terms of trade determinants for developing economies.

Step-by-Step Solution

Analyze Single Factoral Terms of Trade (

T_s

)

T_s = \left(\frac{P_x}{P_m}\right) \times Z_x = T_c \times Z_x

Single factoral TOT incorporates productivity gains in the domestic export sector (

Z_x

), showing import efficiency per productive factor employed.

Analyze Income Terms of Trade (

T_y

)

T_y = \left(\frac{P_x}{P_m}\right) \times Q_x = T_c \times Q_x

Income terms of trade measures total purchasing power of exports by taking net barter TOT and multiplying by export quantity index (

Q_x

Analyze Gross Barter Terms of Trade (

T_g

)

T_g = \left(\frac{Q_m}{Q_x}\right) \times 100

Unlike net barter TOT which uses price indices (

P_x / P_m

), gross barter TOT uses physical volume indices in reversed order (

Q_m / Q_x

Analyze the Prebisch-Singer Hypothesis on Determinants

Identified as structural deterioration of primary producers' TOT

This macroeconomic theory establishes that primary commodities suffer deteriorating terms of trade over time due to low income elasticity of demand and technical progress in industrial countries.

Key Concept

Classification, mathematical formulations, and structural determinants of Terms of Trade (Net Barter, Gross Barter, Income, Single Factoral, and Prebisch-Singer thesis).

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