JAMB Economics 2018 Paper

Concept:Terms of trade show the rate at which a country's exports exchange for its imports.Explanation:The given formula compares export prices with import prices.It is written as:$$\frac{\text{index of export prices}}{\text{index of import prices}} \times 100$$If export prices rise faster than import prices, the index increases.This means the country can buy more imports with the same amount of exports.This measure is known as the commodity terms of trade.Answer:C. commodity terms of trade