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JAMB Commerce 1994 Question 17

Question 17

Foreign Trade

The rate at which a country's exports exchange for its imports is called

  1. A.balance of payments
  2. B.balance of trade
  3. C.terms of payment
  4. D.terms of trade.
Show the answer and explanation

Answer: D (terms of trade.)

Explanation

Terms of trade measure how many imports a unit of exports can buy, i.e. the rate at which exports exchange for imports.