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In a Two-Good,one-Period Model,an Increase in the Terms of Trade

Question 32

Multiple Choice
In a two-good,one-period model,an increase in the terms of trade when Good a is initially imported is caused by

In a two-good,one-period model,an increase in the terms of trade when Good a is initially imported is caused by


A) the price of Good a falling relative to Good b.
B) the price of Good a rising relative to Good b.
C) the consumption of Good a rising.
D) the production of Good b falling.
E) a current account deficit occurring.

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