Economics 9708 · AS & A Level · 6.3

6.3 — practice question

(a)[8]

State how the terms of trade are measured, and explain three possible reasons for the fall in China’s terms of trade shown above.

(b)[12]

Discuss whether an increase in the terms of trade or a decrease in the terms of trade is more likely to be beneficial for an economy.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Knowledge and understanding that the terms of trade are a measure of the relationship between export prices and import prices.” …

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