JAMB Economics 2019 Paper

Concept:Terms of trade compare a country's export prices with its import prices.They are expressed as a percentage using the relevant price indices.Explanation:The formula for terms of trade is:$$\text{Terms of trade} = \frac{\text{Index of export prices}}{\text{Index of import prices}} \times 100$$Substitute the given indices into the formula:$$\text{Terms of trade} = \frac{106}{102} \times 100$$Simplify the fraction:$$\frac{106}{102} \approx 1.0392$$Multiply by $100$ to express as a percentage:$$1.0392 \times 100 = 103.92$$Round to the nearest whole number:$$103.92 \approx 104$$The correct option is the one with $104$.Answer:Terms of trade = 104, which is option B.