IB Economics/International Economics/Terms of trade

Terms of Trade definition of terms of trade: Index of export prices/ index of import prices × 100 Consequences of a change in the terms of trade for a country's balance of payments and domestic economy The significance of deteriorating terms of trade for developing countries Measurement of terms of trade Causes of changes in country's terms of trade in the short-run and long-run Elasticity of demand for imports and exports Possible inverse relationship between Terms of Trade and Balance of Payments - depends on elasticity for imports and exports (Price and Income elasticities)