The ratio at which nations will exchange one product for another is known as the:

Question

Quizplus · Accepted Answer

The ratio at which nations will exchange one product for another is known as the terms of trade. This is the ratio of export prices to import prices, and it reflects the relative strengths of a country's exports and imports. A favorable terms of trade means that a country can import more goods for a given amount of exports, while an unfavorable terms of trade means that a country has to export more to import the same amount of goods. The exchange rate refers to the value of one currency in relation to another currency. The discount rate is the interest rate at which banks can borrow money from the central bank. The balance of trade is the difference between a country's exports and imports of goods and services.

The Ratio at Which Nations Will Exchange One Product for Another