Explain the meaning of terms of trade (2 marks).
b) To calculate index of export and import prices, we choose the base year and the current period. A base period index of export and import price is 100. Thus, ToT for the base year is 100. Suppose, export price index rises to 120 and import price to 110. Calculate the ToT for the current period (3 marks).
c) Give the advantages and disadvantages of terms of trade (10 marks).

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The detailed answer for the above question is provided below A The terms of trade ToT is a measure o... View the full answer