The term of trade can be expressed as

  • A (Price index of export ÷ Price index of export)× 100
  • B (price index of import ÷ price index of export) × 100
  • C (Price index of export ÷ Price index of import)× 100
  • D (Price index of export + Price index of import)× 100
jamb 2015economics

The correct answer is C. (Price index of export ÷ Price index of import)× 100

Term of trade is the comparison between visible and invisible export and visible and invisible import expresses in price. The ratio of export to import. It could be expressed as

(price index of export ÷ price index of import) × 100

Which can be dented as (px ÷pm) × 100

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