NABTEB Economics 2022 Objective — Question 47

Question 47 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2022 Objective paper, with the correct answer and a full explanation.

Given a country's index of export price is 180 and that of import is 200, the terms of trade is

A. 0.09
B. 2.00
C. 90.00Correct
D. 380.00

Explanation

Terms of Trade (TOT) = (Index of export price / Index of import price) x 100 = 180/200 x100 = 90%. A TOT less than 100 means unfavourable terms of trade, i.e. import is greater than export.

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