The terms of trade refers to
A)the rules and regulations that countries must adhere to when trading.
B)the ratio at which a country can trade its exports for imports from other countries.
C)the role of the government in overseeing international trade.
D)a legal document that specifies the trade quantities agreed to by two countries.

Question

Quizplus · Accepted Answer

The terms of trade refer to the ratio at which a country can exchange its exports for imports from other countries. It represents the prices of a country's exports relative to the prices of its imports. If the terms of trade improve, a country can purchase more imports with the same amount of exports, leading to an improvement in its economic welfare.

The Terms of Trade Refers to