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JAMB Economics 1979 Question 38

Question 38

International Trade

The 'terms of trade' means

  1. A.the trade agreement between two countries
  2. B.the difference in the volumes of exports of two countries
  3. C.the value of a unit of export in relation to the value of a unit of import
  4. D.the proportion of total value of exports to the value of total trade
  5. E.none of the above.
Show the answer and explanation

Answer: C (the value of a unit of export in relation to the value of a unit of import)

Explanation

Terms of trade compare export prices with import prices, i.e. how much import one unit of export buys.