The terms of trade refers to
A) the documents that two countries sign in order to facilitate trade.
B) the conditions imposed by the importing country regarding the quality of the imported goods.
C) the exchange rate determined by the exporting and the importing countries.
D) the ratio at which one country trades a domestic product for imported product.

Question

Quizplus · Accepted Answer

The terms of trade refer to the ratio at which one country can trade its exports for imports from another country. It measures the purchasing power of a country's exports in relation to its imports. A country with improved terms of trade can purchase a greater quantity of imports for a given quantity of exports.

The Terms of Trade Refers to