When there is improvement in a country's terms of trade, it means that the country's
A. exports are cheaper relative to imports B. imports are cheaper relative to exports C. volume of imports has declined D. volume of exports has declined
Correct Answer: B
Explanation
Terms of trade (TOT) represent the ratio between a country's export prices and its import prices. If a country's terms of trade improve, it means that for every unit of exports sold it can buy more units of imported goods.
