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

Economics

JAMB 2018

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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Correct Answer: Option C

Explanation

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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