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WAEC Economics 2014 Question 40

Question 40

International Trade

West African countries are experiencing worsening terms of trade because

  1. A.they are primary producers.
  2. B.their currencies are overvalued.
  3. C.they import less machines.
  4. D.they are tertiary producers.
Show the answer and explanation

Answer: A (they are primary producers.)

Explanation

Prices of primary exports tend to fall relative to prices of the manufactured goods they import.