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WAEC Economics 1997 Question 37

Question 37

International Trade

Terms of trade is the

  1. A.ratio of capital movements to export movements
  2. B.ratio of import to short-term export
  3. C.difference between exports and imports
  4. D.ratio of short-term capital movements to long-term capital movements
  5. E.ratio of index of export prices to index of import prices
Show the answer and explanation

Answer: E (ratio of index of export prices to index of import prices)

Explanation

Terms of trade = index of export prices ÷ index of import prices × 100.