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JAMB Economics 2000 Question 48

Question 48

International Trade

A country's import price index by 1995 was 50 and her index of export price was 70. Calculate the terms of trade

  1. A.20%
  2. B.71%
  3. C.120%
  4. D.140%.
Show the answer and explanation

Answer: D (140%.)

Explanation

Terms of trade = export price index ÷ import price index × 100 = 70 ÷ 50 × 100 = 140%.