By terms of trade, we mean the?

Economics JAMB 1985

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 checkmark
  • ratio of short-term capital movements to long-term capital movements

The correct answer is: D

Explanation

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.
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