Multiple Choice
If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace, then
A) the terms of trade of food exporters will improve.
B) the terms of trade of all countries will improve.
C) the terms of trade of cloth exporters will worsen.
D) all countries would be better off.
E) the terms of trade of cloth exporters will improve.
Correct Answer:
Verified
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