Which terms-of-trade concept emphasizes a nation's capacity to import?
A) Income terms of trade
B) Commodity terms of trade
C) Barter terms of trade
D) Price terms of trade

Question

Quizplus · Accepted Answer

Income terms of trade indicate how much a country's exports can buy in terms of imports. This concept focuses on the ability of a nation to buy more imports, which highlights its capacity to import. In contrast, commodity terms of trade focus on the relative prices of a country's exports and imports, barter terms of trade refer to exchange rates based on the exchange of physical goods, and price terms of trade compare the prices of a country's exports and imports without considering the volume.

Which Terms-Of-Trade Concept Emphasizes a Nation's Capacity to Import