If the Index of Export Prices for Country X Increases

question 90

Multiple Choice

If the index of export prices for Country X increases from 120 to 150 and the index of import prices increases from 100 to 125,it may be said that

• A)the terms of trade have improved.
• B)the terms of trade have deteriorated.
• C)there has been no change in the terms of trade.
• D)the terms of trade have improved by 10%.
• E)there is insufficient information to calculate the terms of trade.

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Definitions:

Bargained-For Exchange

An exchange of promises or performance by parties to a contract that provides the consideration necessary to make the contract legally enforceable.

Breach of Contract

The violation of any term or condition of a binding legal agreement, which may result in legal action for remedy.

Illusory Promise

A statement that appears to commit to an action but does not actually bind the party to any obligation.

Promissory Estoppel

A legal principle that prohibits a party from going back on a promise made to another party, if the latter has reasonably relied on that promise to their detriment.