In 2000, the U

question 141

Multiple Choice

In 2000, the U.S. terms of trade was one. In 2009 the U.S. export price index was 1.15 and the U.S. import price index was 1.18. Which of the following statements is the best interpretation of the change in the U.S. terms of trade between 2000 and 2009?

• A) In 2009, the United States had to export 2% more in order to obtain the same amount of imports as in 2000.
• B) In 2009, the United States could export 2% less to obtain the same of amount of imports as in 2000.
• C) Prices of U.S. exports rose more rapidly than prices of U.S. imports.
• D) The U.S. terms of trade improved between 2000 and 2009.

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Definitions:

Bond Coupon Rate

The interest rate stated on a bond when issued, which represents the annual interest payment divided by the bond's face value.

Unrealized Profit

A profit that has been generated on paper through an investment but has not yet been realized through a sale.

Intercompany Sale

Transactions of goods, services, or assets between divisions, subsidiaries, or companies controlled by the same parent company.

Mark-Up

The percentage added to the cost price of goods to cover overhead and profit, determining the selling price.