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 Form 4 Business studies lessons and notes on international trade

Factors that may lead to favourable terms of trade

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Answer Text:
Factors that may lead to favourable terms of trade:
The country is experiencing a favourable terms of trade if:
-The prices of imports decline and those of export remains the constant
-The prices of imports declines while those of exports increase
-The price of imports remains constant while those of exports increase
-The prices of import and export increases but the
rate of increase in export is higher
-Both prices decrease but the decrease in import prices is higher


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