Economics (AS & A Level) · May / June 2021 · Paper 11 · Question 20

Why might an unfavourable movement in a country's terms of trade benefit its economy?

1. AIt would force inefficient firms out of business.
2. BIt would increase the quantity of goods available for domestic consumption.
3. CIt would make domestically-produced goods more expensive than imports.
4. DIt would make the country's exports relative to imports more competitive internationally.

As printed in the paper