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Terms of Trade (TOT)
Terms of trade
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A concept that relates the prices that a country receives for its exports to the prices it pays for its import.
TOT = average price of export / average price of import * 100
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Price are measured in terms of domestic currency
When TOT increases: improvement in TOT ;
When TOT decreases: deterioration in TOT
Causes of changes in Terms of trade
Consequences of changes in the terms of trade
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