The Expression "Terms of Trade" Refers to The

question 45

Multiple Choice

The expression "terms of trade" refers to the:

• A) rate at which a nation can trade its products for imported goods.
• B) credit terms that an exporter extends to an importer.
• C) period of time within which an importer can pay an exporter without incurring a finance charge.
• D) terms on which an importer borrows from his bank in order to finance his purchases.

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Definitions:

Bureau of Labor Statistics

A U.S. government agency that collects, processes, analyzes, and disseminates essential statistical data on labor market activity, working conditions, and price changes in the economy.

Demand-Pull Inflation

Inflation caused primarily by an increase in aggregate demand: too many dollars chasing too few goods.

Wage-Price Spiral

A situation where rising wages lead to higher prices, which in turn lead to demands for even higher wages, creating a cycle of inflation.

Joseph Schumpeter

An economist known for his theories on economic development and creative destruction.