6 Increasing Returns to Scale and Monopolistic Competition + ToT changes TOT Question Russia is exporting mostly commodities. Below find Russia's terms of trade (TOT) during 2012-2019. Russia import/GDP at constant national prices is 0.2 1. What explains the deterioration of Russia's terms of trade from 203 in 2012, to 113 in 2016. 2. Real GDP at Constant National Prices stayed constant during 2012-2016, at level G, [see the chart below]. Calculate the income effect associated with Russia's TOT deterioration from 2012 to 2016, as a fraction of Russian GDP Russia: Terms of trade, price of exports/imports, base year = 2000, 203.1 189.6 182.1 149.7 151.4 138.5 127.7 112.9 2012 2013 2014 2015 2016 2017 2018 2019Russia's real GDP at Constant National Prices 2012-2016 changes were small FRED ~- Real GDP at Constant National Prices for Russian Federation 3,920,000 3,880,000 3,840,000 3,800,000 Millions of 2017 U.S. Dollars 3,760,000 3,720,000 3,680,000 3,640,000 2013 2014 2015 2016 Sources: University of Groningen; University of California, Davis fred.stlouisfed.org