Which of the Following Is True of the Terms of Trade

question 5

Multiple Choice

Which of the following is true of the terms of trade?

• A)It is determined by supply and demand factors.
• B)It is a legal limit on the amount of a commodity that can be imported.
• C)It is determined by General Agreement on Tariffs and Trade.
• D)It is independent of the negotiations between trading partners.
• E)It is identical for all trading partners with differences in tastes.

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Definitions:

Normative Economics

An approach to economics that makes judgments about what the economy should be like or what particular policy actions should be recommended.

Behavior

The actions or reactions of an individual, group, or system in response to external or internal stimuli.

Zero Slope

A line with zero slope remains constant and horizontal, indicating no change in the dependent variable, regardless of changes in the independent variable.

Curve

In economics, it usually refers to a graphical representation of the relationship between two factors, such as supply and demand, price and quantity, etc.