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Economics (AS & A Level) · Oct / Nov 2022 · Paper 12 · Question 22

9708The reasons for international trade

In which situation will a country's terms of trade improve?

  1. AIts total value of imports rises less than its total value of exports.
  2. BIts volume of imports rises less than its volume of exports.
  3. CThe prices of its imports rise by less than the prices of its exports.
  4. DThe value of its external payments rises by less than the value of its external receipts.

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Correct answer: C. The prices of its imports rise by less than the prices of its exports.

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