Terms of Trade of the developing countries are unfavourable due to the fact that whenever income in developed countries increases the demand for primary goods reduces because
A. Income elasticity of demand for primary goods is high.
B. Income elasticity of demand for primary goods is low.
C. Income elasticity of demand is neutral towards primary goods.
D. None of the above
Answer:B
Terms of Trade of the developing countries are unfavourable due to the fact that whenever income in developed countries increases the demand for primary goods reduces because
A. Income elasticity of demand for primary goods is high. B. Income elasticity of demand for primary goods is low. C. Income elasticity of demand is neutral towards primary goods. D. None of the above