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

Correct Answer:

Option C – (Price index of export ÷ Price index of import) × 100

Explanation

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