WAEC - Economics (2012 - No. 45)
When there is improvement in a country's terms of trade, it means that the country's
exports are cheaper relative to imports
imports are cheaper relative to exports
volume of imports has declined
volume of exports has declined
Explanation
Terms of trade (TOT) represent the ratio between a country's export prices and its import prices. If a country's terms of trade improve, it means that for every unit of exports sold it can buy more units of imported goods.
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