impact on GDP

• What is likely to happen to GDP with an improvement in terms of trade?

  GDP is likely to fall
• How does an improvement in terms of trade affect unemployment?

  Unemployment is likely to rise
• What happens to exports if the improvement in terms of trade is due to a rise in export prices?

  Exports will fall
• What is the effect on imports if the improvement in terms of trade is due to a fall in import prices?

  Imports will rise
• What is the consequence of falling exports and rising imports on production?

  Production within the country will reduce
• What is the impact of reduced production on jobs and output?

  There will be a fall in jobs and output
• What does a long-term decline in terms of trade suggest about living standards?

  It suggests a decline in living standards
• Why does a long-term decline in terms of trade affect imports?

  Less imports can be bought