WAEC Economics 2021 Theory — Question 25

Question 25 of 26 from the West African Examinations Council (WAEC) Economics 2021 Theory paper, with the correct answer and a full explanation.

8(b). Distinguish between terms of trade and balance of trade.

Model answer

Terms of trade is the rate/ratio at which a country's exports exchange for its imports (comparing export prices to import prices). Balance of trade is the difference between the value of a country's visible exports and the value of its visible imports.

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