What are the difficulties in the changes of a country's terms of trade ?
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An abrupt change in a country's terms of trade (e.g., a drastic fall in the price of a primary product that is a country's main export) can cause serious balance-of-payments problems if the country depends on the foreign exchange earned by its exports to pay for the import of its manufactured goods and capital ...
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A prloged fall in the terms of trade could br seen as a problem because it can lead to declining living standards are lower GDP.
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