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Economics (AS & A Level) · Oct / Nov 2021 · Paper 12 · Question 23

9708The reasons for international trade

The average price of a country's exports increased by 5% and the average price of its imports increased by 10%. What can definitely be concluded from this information?

  1. AIts balance of trade will improve.
  2. BIts balance of trade will worsen.
  3. CIts terms of trade have improved.
  4. DIts terms of trade have worsened.

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Correct answer: D. Its terms of trade have worsened.

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