Terms of trade represent the ratio between a country's export prices and its import prices. Changes import and export prices impact the TOT, and it's pertinent to understand what caused the price increases or decreases. For example, during the commodity price boom of the early. The terms of trade (TOT) is the relative price of imports in terms of exports and is defined as the ratio of export prices to import prices. It can be interpreted as the. If a country's terms of trade improve, it means that for every unit of exports sold it can buy more units of imported goods. It can also have a beneficial effect on domestic cost-push inflation as an improvement indicates falling import prices relative to export prices.
Terms of trade, relationship between the prices at which a country sells its exports and the prices paid for its imports. If the prices of a country's exports rise. Terms of trade are defined as the ratio between the index of export prices and the index of import prices. Definition: The Terms of Trade is the average price of exports / by the average price of imports. It is a measure of a countries relative.
In economics, terms of trade (TOT) refer to the relationship between how much money a country pays for its imports and how much it brings in from exports. Australia s terms of trade is calculated as the ratio of export prices to import prices . If this index increases it implies that Australia is receiving relatively more for its. Definition of terms of trade: Not the contractual conditions of sale between a buyer and a seller, but the quantity of foreign goods and services (imports) that a . By terms of trade, is meant terms or rates at which the products of one country are exchanged for the products of the other. It is known to us that every country has.