JAMB - Economics (1985 - No. 32)
By terms of trade, we mean the?
ratio of exports and imports
differences between exports and imports
differences between current account and capital account
index of export prices to import prices expressed as a percentage
ratio of short-term capital movements to long-term capital movements
Explication
Terms of trade (TOT) refers to the relative price of imports in terms of exports and is defined as the ratio of export prices to import prices. It can be interpreted as the amount of import goods an economy can purchase per unit of export goods.