A country’s terms of trade can be improved by ________?

A. Revaluation of currency
B. Collective bargaining
C. Reducing demand for imported goods
D. Imposing lower export duties

Correct Answer:

Option C – Reducing demand for imported goods

Explanation

A country can purchase more imported goods for every unit of export that it sells when its TOT improves. An increase in the TOT can, therefore, be beneficial because the country needs fewer exports to buy a given number of imports.To improve the terms of trade, imports have to be reduced to atleast match up exports