International Factors Affecting Development in Developing Economies

The video explores international factors influencing the development of economies, focusing on terms of trade, commodity prices, indebtedness, and reliance on international investment. It explains how changes in export and import prices affect a country's competitiveness and development. The video also discusses the impact of falling commodity prices, high debt levels, and the risks associated with dependency on international investment, including capital flight and brain drain.

What is the 'terms of trade' in the context of international economics?

• The difference between a country's GDP and its trade balance

• The total value of a country's exports

• The relative price of a country's exports in terms of imports

• The ratio of a country's imports to its exports

Why is the terms of trade particularly important for developing countries?

• They rely heavily on the export of manufactured goods

• They have a diversified economy

• They derive significant revenue from primary sector exports

• They have a stable economic environment

What happens to a country's terms of trade if export prices increase while import prices remain constant?

• The terms of trade deteriorate

• The terms of trade remain unchanged

• The terms of trade improve

• The terms of trade become irrelevant

How does technological advancement affect the supply curve in agricultural markets?

• It makes the supply curve more elastic

• It shifts the supply curve to the right

• It shifts the supply curve to the left

• It has no effect on the supply curve

What is one consequence of excess supply in commodity markets?

• No change in prices

• Decreased prices

• Stable prices

• Increased prices

What structural problem can arise from deteriorating terms of trade?

• Decreased reliance on international creditors

• Increased current account surplus

• Increased current account deficit

• Stable economic growth

Why might a country turn to international creditors?

• To improve public infrastructure

• To decrease its import prices

• To increase its export revenues

• To stabilize its currency

What is 'capital flight' in the context of international investment?

• The increase in foreign direct investment

• The stabilization of a country's currency

• The outflow of resources and assets from a country

• The inflow of foreign capital into a country

What is a potential consequence of capital flight?

• Decreased levels of corruption

• Stable economic activity

• Increased social and political unrest

• Increased value of local currency

What is a 'human brain drain'?

• The influx of skilled labor into a developing country

• The increase in educational opportunities

• The outflow of skilled labor from a developing country

• The stabilization of a country's workforce