What is measured by the ratio of export prices to import prices?
A)The terms of trade
B)The productivity ratio
C)The trade standards
D)The gains from trade
E)The balance of trade

Question

Quizplus · Accepted Answer

The ratio of export prices to import prices is commonly known as the terms of trade. It refers to the value of a country's exports relative to its imports. A higher ratio means that a country can buy more imports with a given quantity of exports, indicating an improvement in its terms of trade. Alternatively, a lower ratio means that a country can buy fewer imports, suggesting a deterioration in its terms of trade.

What Is Measured by the Ratio of Export Prices to Import