A country has favourable terms of trade when th... - WAEC Economics 2015 Question
A country has favourable terms of trade when the prices of her
A
exports rises relative to the price of her imports
B
exports falls relative to the price of her imports
C
imports rise faster than the prices of imports
D
imports and exports move in the same direction
correct option: a
If the prices of a country's exports rise relative to the prices of its imports, one says that its terms of trade have moved in a favourable direction, because, in effect, it now receives more imports for each unit of goods exported.
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