Economics 9708 · AS & A Level · 6.3

6.3 — practice question

In Australia in 2005, one shipload of exported iron ore could buy 2200 imported flatscreen TVs. By 2010, an equally large shipload could buy 22 000 imported flatscreen TVs. Which pair of price movements must have occurred to bring about this change in Australia's terms of trade?

  • Aaverage export price: decrease; average import price: decrease
  • Baverage export price: decrease; average import price: increase
  • Caverage export price: increase; average import price: decrease
  • Daverage export price: increase; average import price: increase

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