A country has a trade deficit. The demand for its imports and exports are both price elastic.
All of the following would lead to an a reduction in the country’s trade deficit except which one?
A . A fall in consumer incomes in the country.
B . An improvement in the country’s terms of trade.
C . A depreciation in the exchange rate for the country’s currency.
D . A rise in the rate of inflation in its trading partners’ economies.
Answer: B