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    Question

    The index of import prices stands at 120 and that of exports is 156. What is the terms of trade

    A 1.30 Correct Answer Incorrect Answer
    B 0.769 Correct Answer Incorrect Answer
    C 1.20 Correct Answer Incorrect Answer
    D 1.56 Correct Answer Incorrect Answer

    Solution

    Terms of Trade  = Price of Exports/Price of Imports                                               = 156/120 = 1.30

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