What are terms of trade?
A) the series of international agreements that a country agrees to abide to in the world economy
B) the relative values of its exports and imports
C) the network of functions that connect a country to the international economy
D) laws that a country must skirt if it is to make a profit
E) the surplus items that a country has available for export

Question

Quizplus · Accepted Answer

Terms of trade refer to the ratio between a country's export prices and its import prices, which determines the relative value of its exports and imports. A favorable terms of trade means that a country can earn more from its exports than it pays for its imports.

What Are Terms of Trade