The formula (index of export prices)/(index of import prices) x 100 is used to measure the____________
A. Volume of trade between countries B. direction of international trade C. commodity terms of trade D. volume of imports
Correct Answer: C
Explanation
Term of trade refer to the rate at which a country’s exports exchange for its import. It is expressed as a relation between the prices a country receives for its export and the prices it pay for import. Term of trade is usually measured by this mathematical formula:
