Preference

Question: In which of the following situation will a country's terms of trade worsen?

  1. a.
    The prices of its imports rise by more than the prices of its exports
  2. b.
    The total value of external payments rise by more than the total value of external receipts
  3. c.
    The value of its imports rises by more than the value of its exports
  4. d.
    The volume of its imports rises by more than the volume of its exports
  5. e.
    None of these
Answer: a
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