Although the Price of Oil and Some Commodities Has Increased

question 67

Multiple Choice

Although the price of oil and some commodities has increased in recent years, the price of most raw materials has declined. For countries that primarily produce raw materials, this development has led to which of the following?

• A)Declining terms of trade
• B)A rise in the terms of trade
• C)Opportunities to rely on inexpensive labor
• D)An increase in the export of raw materials

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Definitions:

Consumption

The use of goods and services by households, affecting economic conditions and indicating economic health through consumer spending patterns.

Income

The monetary payment received by an individual or household for their services, investments, or transfer payments.

Interest Rate

The percentage of an amount of money charged by a lender to a borrower for the use of their funds over a period of time, typically expressed as an annual percentage.

Present Value

The current worth of future cash flows discounted at an appropriate discount rate, reflecting the time value of money.