WAEC Commerce 2013 Paper

Concept:The terms of trade compares a country's export prices with its import prices.Explanation:It is measured as the ratio of the index of export prices to the index of import prices.The formula is:$$\text{Terms of Trade} = \frac{\text{Index of Export Prices}}{\text{Index of Import Prices}} \times 100$$This ratio helps determine whether a country earns more from its exports than it spends on its imports.Among the given choices, this ratio is known as the terms of trade.Answer:C. terms of trade