NABTEB Economics 2024 Objective — Question 46
Question 46 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2024 Objective paper, with the correct answer and a full explanation.
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Terms of trade are favourable when
- A. A. the value of visible imports is greater than that of visible exports
- B. B. price of imports is greater than that of exports
- C. C. payments on imports are greater than receipts from exports
- D. D. price of exports is rising faster than that of importsCorrect
Explanation
The terms of Trade (TOT) is the comparison of a country's visible and invisible exports with her visible and invisible imports using the price index. However, it is favourable (surplus) when the price of exports is greater than the price of imports. It is unfavourable (deficit) when the reverse is the case.
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