Assume in base year 1990,the net barter terms of trade is equal to 100,and we find that,for the 2004 fiscal year,the US price index for exports has fallen 7 percent and the price index for imports has risen by 5 percent.What is the value of the U.S.net barter terms of trade?
A)63.4
B)101.2
C)88.6
D)112.5

Question

Quizplus · Accepted Answer

The formula for calculating net barter terms of trade is:

Net Barter Terms of Trade = Price Index of Exports / Price Index of Imports * 100

Using the given information, we can calculate the new values for the price indices:

Price Index of Exports in 2004 = 93 (7% reduction from 100)
Price Index of Imports in 2004 = 105 (5% increase from 100)

Plugging these values into the formula gives:

Net Barter Terms of Trade = 93 / 105 * 100 = 88.6

Therefore, the correct answer is C.

Assume in Base Year 1990,the Net Barter Terms of Trade