Terms of Trade

PrepNuggets

The ratio of an index of the prices of a country’s exports to an index of the prices of its imports, expressed relative to a base value of 100. For instance, if a country’s exports price index is currently 165, and the imports price index is 150, the terms of trade will be 110.  This means that the prices of exports have risen by 10% relative to the prices of imports since the base period.