The terms of trade of a country improves when
A)The import price of a country relatively rises to its export prices
B)The import price of a country is the same with its export prices
C)The export price of a country does not rise in relation to its import prices
D)The export price of a country relatively rises to its import prices

Question

Quizplus · Accepted Answer

The terms of trade improve when the price of a country's exports rises relative to the price of its imports, allowing the country to buy more imports for any given level of exports.

The Terms of Trade of a Country Improves When