Term of trade for a country are the ratio of _______________ to _____________?
Correct answer: B. export prices; import prices
- A. its opportunity costs; world opportunity costs
- B. export prices; import prices
- C. Value of exports; value of imports
- D. its currency; other currencies
Explanation
The terms of trade measure the price of a country’s exports relative to the price of its imports, expressed as export prices divided by import prices. An improvement means exports buy more imports than before.
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