The terms of trade between two countries refer to
A)What price the two countries agree upon for their imports and exports.
B)The rules governing trade between the two countries.
C)The amount of good A given up for good B.
D)The terms set by the World Trade Organization for trade.

Question

Quizplus · Accepted Answer

The terms of trade refer to the rate at which the two countries exchange goods, specifically the ratio of export prices to import prices. It measures the amount of one good that a country needs to export in order to receive a certain amount of the other good.

The Terms of Trade Between Two Countries Refer to