Question

Terms of trade between two countries refer to a ratio of ______.

• A. export prices to import prices
• B. currency values
• C. import to export
• D. balance of trade to Balance of payments

Answer 1

The correct option is A export prices to import prices

Terms of trade. The terms of trade (TOT) is 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 number of import goods an economy can purchase per unit of export goods