Terms of trade Flashcards
1
Q
What is terms of trade
A
A ratio that tells us how expensive exports are relative to our imports
2
Q
What is the formula for terms of trade
A
(Index of export prices/index of import prices)x100
3
Q
What are the 4 factors that affect terms of trade
A
-Raw material prices
-Inflation rate
-Exchange rates
-Tariffs
4
Q
A
