A Term-Of-Trade Index That Equals 90 Indicates That Compared to the Base

question 103

Multiple Choice

A term-of-trade index that equals 90 indicates that compared to the base year:

• A) It requires a greater output of domestic goods to obtain the same amount of foreign goods
• B) It requires a lesser amount of domestic goods to obtain the same amount of foreign goods
• C) The price of exports has fallen from $100 to $90
• D) The price of imports has fallen from $100 to $90