There Will Be a Favourable Change in a Nation's Terms

question 52

Multiple Choice

There will be a favourable change in a nation's terms of trade if the

• A)export price index rises by more than the import price index.
• B)export and import prices rise by the same amount.
• C)export and import prices fall by the same amount.
• D)export and import prices stay the same.
• E)import price index rises by more than the export price index.

---

Definitions:

International Tourism

Traveling to foreign countries for leisure, business or other purposes, which contributes to the economic and cultural exchange between nations.

Foreign Capital Inflow

The entry of capital from one country into another, where it is used to purchase assets or invest in business activities, often enhancing economic development.

Depreciation

The process by which capital assets lose value over time due to use, wear and tear, or obsolescence.

Depreciation

The process through which an asset loses value over time due to use, wear and tear, or obsolescence.