The terms of trade is given by the prices ?
Correct answer: C. Received for exports and paid for imports
- A. Paid for all goods exported by the home country
- B. Received for all goods exported by the home country
- C. Received for exports and paid for imports
- D. Of primary products as opposed to manufactured products
Explanation
The terms of trade are measured as the price index of exports divided by the price index of imports. In plain terms, they compare what the country receives for exports with what it pays for imports.
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