Terms of Trade - SS3 Economics Past Questions & Answers - page 1

1

What does the term "terms of trade" refer to?

A

The ratio between a country's exports and imports

B

The number of exports a country produces

C

The cost of shipping goods between countries

D

The number of imports a country consumes

 

CORRECT OPTION: a
2

What is a favourable terms of trade?

A

When the prices of exports are higher than the prices of imports

B

When the prices of exports are lower than the prices of imports

C

When a country has a trade deficit

 

D

When a country's imports are greater than its exports

CORRECT OPTION: a
3

How does an unfavourable term of trade affect a country?

A

 It can lead to a decrease in income and standard of living

B

It can lead to an increase in income and standard of living

C

It has no effect on a country's economy

D

It can lead to a decrease in the cost of living

 

CORRECT OPTION: a
4

Why is maintaining favorable terms of trade important for a country?

A

It leads to economic growth and development

B

It increases the cost of living

 

C

It leads to a decrease in income and standard of living

D

It has no effect on a country's economy

CORRECT OPTION: a
5

Which of the following best describes terms of trade?

A

The value of a country's exports relative to its imports

 

B

The total value of a country's exports

C

The total value of a country's imports

D

The number of countries a country trades with

CORRECT OPTION: a
6

Define terms of trade in your own words.

Terms of trade refer to the ratio between the price of a country's exports and the price of its imports.

 

7

Why is maintaining favourable terms of trade important for a country's economic growth?

Maintaining favourable terms of trade is important for a country's economic growth because it leads to an increase in the country's income and standard of living, which supports development and progress.

 

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