Canada is both an importer and an exporter of cars. If Canada exports more cars than it imports and the price of cars rises, then ceteris paribus, Canada's terms of trade... O a. Deteriorates because the gain in imports more than offsets the loss of exports. o b. Remains the same because the index of export prices rises by the same amount as the index of import prices. O c. Improves because the index of export prices rises and the index of import prices falls. o d. Improves because the index of export prices rises more than the index of import prices. O e. Deteriorates because of the loss of exports that would result.

Canada is both an importer and an exporter of cars. If Canada exports more cars than it imports and the price of cars rises, then ceteris paribus, Canada's terms of trade... O a. Deteriorates because the gain in imports more than offsets the loss of exports. o b. Remains the same because the index of export prices rises by the same amount as the index of import prices. O c. Improves because the index of export prices rises and the index of import prices falls. o d. Improves because the index of export prices rises more than the index of import prices. O e. Deteriorates because of the loss of exports that would result.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 4PA

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