Chapter 5 - ToT Flashcards
(4 cards)
1
Q
Terms of Trade
A
Index which measures relative movements in import and export prices
2
Q
Formula for calculating the TOT
A
Export PI / Import PI x 100
3
Q
Effects of rise in TOT
A
Business cycle ^ Output, employment ^ Trade Balance ^ Exchange rate ^ National income ^ Investment ^
4
Q
What is real GDI
A
Real gross domestic income (real GDI) measures the purchasing power of the total incomes generated by domestic production
