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Worksheets4.1.4 Terms of Trade
Total questions: 17
Worksheet time: 5mins
True or false? The Terms of Trade looks at the relationship between the price received for exports and the amount of imports a country is able to buy with that money.
True
False
The Terms of Trade is calculated as follows:
ratio of the import price index to the export price index
ratio of the export price index to the import price index
ratio of the export price index to the import price index * 100
ratio of the import price index to the export price index * 100
Terms of Trade improves when the relative export prices ...
fall i.e. compared to the price of inputs.
rise i.e. compared to the price of inputs.
fall i.e. compared to the price of imports.
rise i.e. compared to the price of imports.
A rise in export prices means...
more imports can be purchased for a given level of exports
fewer imports can be purchased for a given level of exports
more imports will be purchased
fewer imports will be purchased
Which of the following can be deduced from the chart over the period 2000-2018?
Export prices and import prices have fallen at the same rate
Import prices have risen at a faster rate than export prices
Export prices have risen at a faster rate than import prices
Import prices have fallen relative to export prices
The value of Afghanistan's imports have risen relative to the value of its exports
The average price of Afghanistan's exports have fallen relative to the average price of its imports
Afghanistan is likely to experience an improvement in its living standards
If the price of imports falls then it will lead to an improvement in the Terms of Trade but a worsening of the current account as it could lead to a rise in D for imports if ...
YED >-1.
PES > 1.
PED <-1.
PED >-1.
If the price of exports rises, ceteris paribus, then it will lead to an improvement in the Terms of Trade but a worsening of the current account as it could lead to a fall in D for exports if ...
PED <-1
YED >-1
PED >-1
PES > 1
Which of the following factors will NOT directly affect a country's Terms of Trade?
Unemployment rates
Exchange rates
Inflation rates
Productivity
The Prebisch-Singer Hypothesis states that...
over the long run the price of primary commodities declines in proportion to manufactured goods
over the short run the price of primary commodities rises in proportion to manufactured goods
over the long run the price of primary commodities rises in proportion to manufactured goods
over the short run the price of primary commodities declines in proportion to manufactured goods
Which of the following would most likely cause a deterioration in a country's Terms of Trade?
No change in export or import prices
A fall in import prices relative to export prices
A rise in import prices relative to export prices
A rise in export prices relative to import prices
What does an improvement in the Terms of Trade indicate about a country's purchasing power?
The country can buy fewer imports for a given level of exports
The country can buy more imports for a given level of exports
The country imports less and exports more
The country exports less and imports more
Which of the following best describes a deterioration in a country's Terms of Trade?
Export prices fall relative to import prices
Export prices and import prices remain unchanged
Import prices rise relative to export prices
Export prices rise relative to import prices
True or false? A country with improving Terms of Trade can purchase more imports for the same value of exports.
True
False
Which factor is most likely to cause an improvement in a country's Terms of Trade? Choose more than one answer.
A decrease in export prices
An increase in export prices
A decrease in import prices
An increase in import prices
True or False? An improvement in a country's Terms of Trade always leads to an improvement in its current account.
Who is the greatest Premier League manager?
Pep Guardiola
Pep Guardiola
Pep Guardiola
Pep Guardiola
