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WAEC Economics 2015 Question 46

Question 46

International Trade

A country has favourable terms of trade when the prices of her

  1. A.exports rise relative to the prices of imports.
  2. B.exports fall relative to the prices of imports.
  3. C.imports rise faster than the prices of exports.
  4. D.imports and exports move in the same direction.
Show the answer and explanation

Answer: A (exports rise relative to the prices of imports.)

Explanation

Higher export prices relative to import prices mean each export buys more imports.