Which of the following is correct? (A) The gross barter terms of trade uses quantity index for imports…
Gross barter terms use import quantity divided by export quantity, while net barter terms use export price divided by import price, with base normalization. A and C are…
Choose your answer
Which of the following is correct?
(A) The gross barter terms of trade uses quantity index for imports and exports
(B) Both gross barter terms of trade and net barter terms of trade make use of the price index for imports and exports
(C) The net barter terms of trade uses price index for imports and export
(D) Both gross barter terms of trade and net barter terms of trade make use of the quantity index for imports and exports
(E) The gross barter terms of trade uses price index but the net barter terms of trade uses quantity index for imports and exports
Answer and explanation
Correct answer D
Gross barter terms use import quantity divided by export quantity, while net barter terms use export price divided by import price, with base normalization. A and C are correct. B and D wrongly use one index type for both, and E reverses the definitions.
Practice for these exams
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UGC NET Economics