CAIE A-Level Economics AS 6.1.3 Terms of Trade Questions

Practise measuring the terms of trade, explaining changes and assessing impacts on exports, imports and economies with CAIE Economics AS questions.

Exam points

Calculate the terms of trade index, explain causes of its changes, and assess how changes affect exports, imports and an economy.

[Maximum number: 1]

The terms of trade for a country increased from 100 to 120.
Which statements are correct?

1 The terms of trade have deteriorated.
2 Fewer exports are needed to buy the same quantity of imports.
3 The balance of payments must improve.

1 and 2

1 only

2 and 3

2 only

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CAIE A-Level Economics AS 6.1.3 Terms of Trade Questions question 1