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Question : The term of trade refers to_____.

Option 1: the excess of import expenditures over export earnings

Option 2: the trade agreements

Option 3: the terms and conditions on which a country is offered loan

Option 4: the ratio between export prices and import prices


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: the ratio between export prices and import prices


Solution : The correct option is the ratio between export prices and import prices.

In 1927, the term trade was first used by US economist Frank William Taussig. The term trade refers to the ratio at which a country can exchange its exports for imports. It represents the relative prices of a country's exports and imports and is typically expressed as a numerical index or ratio. A favourable improvement in terms of trade means a country can buy more imports for the same quantity of exports, while an unfavourable decline means it can buy fewer imports.

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