Terms of Trade in Economics: Definition, Formula & Examples


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In economics, what does 'terms of trade' mean?

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1. Which of the following best describes a benefit of export prices exceeding import prices?

2. What is the term used to describe a situation where the price of imports exceeds the price of exports?

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About This Quiz & Worksheet

Questions on this quiz will help you discover how much you know about terms of trade. You should be prepared to demonstrate a basic knowledge of imports and exports as well.

Quiz & Worksheet Goals

This quiz will fulfill its purpose by ensuring you can answer questions about:

  • Import and export prices
  • Factors that influence terms of trade
  • The terms of trade formula

Skills Practiced

You'll get the chance to practice the following skills as you complete this quiz:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on terms of trade in economics
  • Defining key concepts - prove that you can accurately define the economic meaning of terms of trade
  • Interpreting information - verify that you can review information regarding differences between costs of imports and costs of exports and interpret it correctly

Additional Learning

Gain a better understanding of this subject by studying the lesson entitled Terms of Trade in Economics: Definition, Formula & Examples. Information covered in this lesson includes:

  • How terms of trade are expressed
  • Steps to calculate the terms of trade of an economy
  • Ways the terms of trade might change