When there is improvement in a country’s terms of trade, it means that the country’s
- exports are cheaper relative to imports
-
imports are cheaper relative to exports
- volume of imports has declined
- volume of exports has declined
The correct answer is: B
Explanation
Terms of trade (TOT) represent the ratio between a country's export prices and its import prices. If a country's terms of trade improve, it means that for every unit of exports sold it can buy more units of imported goods.