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)