In 2000, the U.S. terms of trade was one. In 2009 the U.S. export price index was 1.15 and the U.S. import price index was 1.18. Which of the following statements is the best interpretation of the change in the U.S. terms of trade between 2000 and 2009?
a. In 2009, the United States had to export 2% more in order to obtain the same amount of imports as in 2000.
b. In 2009, the United States could export 2% less to obtain the same of amount of imports as in 2000.
c. Prices of U.S. exports rose more rapidly than prices of U.S. imports.
d. The U.S. terms of trade improved between 2000 and 2009.
Answer: a. In 2009, the United States had to exprt 2% more in order to obtain the same amount of imports as in 2000.
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Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week(millions of gallons) Price pergallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 Exhibit 3-5 shows the supply schedule for Tucker's Cola. If Tucker's Cola and Refresh Cola are the only two suppliers in the cola market and Refresh Cola is willing to sell 5 million gallons when the price is $3.00, 4 million gallons when the price is $2.50, 3 million gallons when the price is $2.00, 2 million gallons when the price is $1.50, 1 million gallons when the price is $1.00, and 0 gallons when the price is $0.50 or less,
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