Developing countries have often argued that their terms of trade have worsened because
A) their import prices have declined relative to their export prices.
B) their import prices have risen relative to their export prices.
C) their import prices and export prices have increased.
D) their import prices and export prices have decreased.

Question

Quizplus · Accepted Answer

Developing countries have argued that their terms of trade have worsened because their import prices have risen relative to their export prices. This means that they are paying more for the goods they need to import, while receiving less revenue from the exports they sell. This puts them at a disadvantage in the global market and reduces their ability to invest in their own economic development.

Developing Countries Have Often Argued That Their Terms of Trade