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Terms of trade represent the ratio between a country's export prices and its import prices and are used as a measure of a nation's economic health.
By terms of trade, is meant terms or rates at which the products of one country are exchanged for the products of the other. It is known to us that every country has got its own money. The currency of one country is not legal tender in the other country.
Definition of. Terms of trade. Terms of trade are defined as the ratio between the index of export prices and the index of import prices. The terms of trade measures the rate of exchange of one product for another when two countries trade. A-level economics analysis on the terms of trade - revision video David Ricardo's theory of comparative advantage explains that if countries specialise in the production of the good/service in which.
Terms of trade. A country’s terms of trade measures a country’s export prices in relation to its import prices, and is expressed as. For example, if, over a given period, the index of export prices rises by 10% and the index of import prices rises by 5%, the terms of trade . Start studying Terms of Trade. Learn vocabulary, terms, and more with flashcards, games, and other study tools.