Notes>International Economics>3.5 Terms of Trade (HL)

Definitions   Terms of trade is an index that shows the value of a country’s average export prices relative to their average import prices.   Equation   Terms of Trade (TOT) = Weighted index of the average export prices X 100 Weighted index of the...

Terms of Trade (HL) The terms of trade is the ratio of the avergae price of exports over the avergae price of imports expressed as index numbers times by 100: Index of exports prices / index of import prices x 100 Therefore, it measure the volume of imports that can...