Question
What terms of trade is worsen for a country, it's;
A)volume of exports increase more than it's volume of imports
B) Imports prices increases more than it's export prices
C) volume of imports increase more than it's volume of exports
D) export increases more than it's import prices
Which is the correct answer?
A)volume of exports increase more than it's volume of imports
B) Imports prices increases more than it's export prices
C) volume of imports increase more than it's volume of exports
D) export increases more than it's import prices
Which is the correct answer?
Answers
GPT-4o mini
The correct answer is **B) Import prices increases more than its export prices.**
Terms of trade (ToT) refer to the relative prices of a country's exports in comparison to its imports. If the prices of imports increase more than the prices of exports, it means that the country has to give up more of its exports to obtain the same quantity of imports. This results in a worsening of the terms of trade for that country.
Terms of trade (ToT) refer to the relative prices of a country's exports in comparison to its imports. If the prices of imports increase more than the prices of exports, it means that the country has to give up more of its exports to obtain the same quantity of imports. This results in a worsening of the terms of trade for that country.