For the oil-importing countries, the increase in oil prices in 1970s and early 2000s contributed to all of the following except ?
Correct answer: D. improving terms of trade
- A. balance of trade deficits
- B. price inflation
- C. constrained economic growth
- D. improving terms of trade
Explanation
Higher oil prices increase import bills, worsen trade balances, and raise production and consumer prices, while also restricting growth in oil-importing economies. They do not improve the terms of trade because imports become more expensive relative to exports.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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