A decline in a country's terms of trade is equivalent to an increase in the standard of living because consumers can afford to buy more goods and services.

Question

Quizplus · Accepted Answer

A decline in a country's terms of trade means it gets less for its exports relative to its imports, potentially reducing the purchasing power and standard of living, as it may have to spend more to buy the same amount of goods and services from abroad.

A Decline in a Country's Terms of Trade Is Equivalent