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Describe various terms of trade.

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Describe various terms of trade.

Posted by Natasha Mishra 5 years ago

CBSE > Class 11 > Business Studies

1 answers

Meghna Thapar 5 years ago

The terms of trade (TOT) is the relative price of exports in terms of imports and is defined as the ratio of export prices to import prices. It can be interpreted as the amount of import goods an economy can purchase per unit of export goods. Terms of trade (TOT) is a measure of how much imports an economy can get for a unit of exported goods. • Since, economies typically export and import many goods, measuring the TOT requires defining price indices for exported and imported goods and comparing the two.

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