Question

Terms of trade refers to: Group of answer choices The opportunity costs incurred in trade. The rate at which goods are exchanged. The degree to which one country has an absolute advantage. Which country pays the transportation costs when trade occurs

Answer 1

Answer:

The rate at which goods are exchanged.

Explanation:

It is the ratio of a country's export prices to import prices

Terms of trade = (export / import) x 100

export would comprise of goods and services produced in the US that are been sold to foreign countries

Import would comprise of foreign produced goods and services that are been sold in the US

Terms of trade that exceeds 100 is a positive economic indicator

for example let us assume export is $1000 and import is $500

terms of trade = (1000 / 500) x 100 = 200