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JAMB Economics 1978 Question 30

Question 30

International Trade

The expression 'Terms of Trade' is used to describe

  1. A.the quality of exports
  2. B.the direction of foreign trade
  3. C.terms of purchase on deferred payment basis
  4. D.the rate at which exports exchange for imports
  5. E.import licensing.
Show the answer and explanation

Answer: D (the rate at which exports exchange for imports)

Explanation

Terms of trade measure how many imports a unit of exports can buy, i.e. the ratio of export prices to import prices.