The terms of trade reflect the:
A)rate at which gold exchanges internationally for any domestic currency
B)ratio at which nations will exchange two products
C)fact that the gains from trade will be divided equally
D)cost conditions embodied in the production of two products in a single country
E)the ratio of the two countries' currencies

Question

Quizplus · Accepted Answer

The terms of trade refer to the ratio at which two countries' exchange products. It reflects the quantity of exports that one unit of imports can buy. In other words, it reflects the exchange rate of goods between two countries.

The Terms of Trade Reflect The