Measurement of Terms of Trade - SS3 Economics Past Questions and Answers - page 1
How is the terms of the trade index calculated?
Index of export prices divided by index of import prices, then multiplied by 100
Index of import prices divided by index of export prices, then multiplied by 100
Index of export prices multiplied by index of import prices, then divided by 100
Index of import prices multiplied by index of export prices, then divided by 100
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What do high terms of trade index indicate?
Favourable terms of trade
Unfavourable terms of trade
No impact on a country's economy
A decrease in the cost of living
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Why is the measurement of terms of trade important?
It helps assess a country's economic performance
It determines the number of imports a country can purchase
It predicts future changes in a country's exports
It has no impact on a country's economic growth
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What is the index of export prices?
The average price of goods a country exports
The total value of goods a country exports
The number of countries a country exports to
The cost of shipping goods between countries
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What is the index of import prices?
The average price of goods a country imports
The total value of goods a country imports
The number of countries a country imports from
The cost of exporting goods to other countries
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What is the purpose of measuring terms of trade?
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How does a high terms of trade index impact a country's economy?
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