The formula (index of export prices)/(index of import prices) x 100 is used to measure the____________

  • A Volume of trade between countries
  • B direction of international trade
  • C commodity terms of trade
  • D volume of imports
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The correct answer is C. commodity terms of trade

Term of trade refer to the rate at which a country’s exports exchange for its import.

It is expressed as a relation between the prices a country receives for its export and the prices it pay for import. Term of trade is usually measured by this mathematical formula:

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