Neco 2024 Economics Question 33

Practice objective / multiple choice question 33 from the 2024 Neco Economics examination.

Neco 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 33 NECO • 2024 • ECONOMICS • objective

In year 1 the export price index of Country X was 100 and the import price index was 110. In year 2 the export price index rose to 120 while the import price index fell to 99. (i) Compute the percentage change in the terms of trade index between the two years. (ii) If a 10 % tariff is imposed on imports after the change, raising the import price index proportionally, what is the new terms of trade index? Express your answers to two decimal places.

Answer Options

A. (i) Terms of trade decreased by 5.00 %; (ii) New terms of trade index = 115.00.
B. (i) Terms of trade increased by 20.00 %; (ii) New terms of trade index = 108.90.
Correct Answer C. (i) Terms of trade increased by 33.33 %; (ii) New terms of trade index = 110.10.
D. (i) Terms of trade increased by 33.33 %; (ii) New terms of trade index = 120.00.
Correct Answer
C
Correct Option:
(i) Terms of trade increased by 33.33 %; (ii) New terms of trade index = 110.10.

About This Question

This is Neco 2024 Economics Question 33. It is one of the objective questions from the 2024 Neco Economics examination.

Difficulty level: Medium .

View More Neco 2024 Economics Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support