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:

Railroad System

A transportation network consisting of tracks, stations, and vehicles (such as trains) used for moving goods and people over long distances.

Free Market Capitalism

Free Market Capitalism is an economic system characterized by private ownership of resources and businesses, where the prices of goods and services are determined in a free price system set by supply and demand.

Natural Force

These are elements of nature that can have profound effects on human activities and the environment, such as earthquakes, hurricanes, or solar radiation.

Social Responsibility

The obligation of individuals, organizations, and businesses to act for the benefit of society at large, focusing on ethical behavior and societal well-being.