The ratio of an index of a country’s export prices to an index of its import prices.
- A ratio comparing export prices to import prices, the terms of trade is related to current accounts and the balance of payments.
- To be sure, there are substantial benefits to be derived in terms of trade, price transparency and economic efficiency from the embrace of a common currency union.
- The sources of the liquidity squeeze include poorer terms of trade with customers and suppliers and a less accommodating approach by banks.
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