Canada Is Both an Importer and an Exporter of Automobiles

question 8

Multiple Choice

Canada is both an importer and an exporter of automobiles. If Canada exports more automobiles than it imports, and the price of automobiles rises, then Canada's terms of trade will likely

• A)deteriorate because of the loss of exports that would result.
• B)remain the same because the index of export prices would rise by the same amount as the index of import prices.
• C)deteriorate because the loss of exports would be more than offset by the gain in imports.
• D)improve because the index of export prices would rise and the index of import prices would remain unchanged.
• E)improve because the index of export prices will rise more than the index of import prices.

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Definitions:

P-Value

A statistical measure that helps scientists determine the significance of their research results; a low p-value indicates strong evidence against the null hypothesis.

Binomial Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given number of observations.

Significance Level

A statistical term that quantifies the probability of rejecting the null hypothesis when it is actually true, typically expressed as a percentage or decimal.

Expected Frequency

The predicted count of occurrences for a particular category or event in a statistical distribution, based on a theoretical probability.