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Terms of trade, the Glossary

Index Terms of trade

The terms of trade (TOT) is the relative price of exports in terms of imports and is defined as the ratio of export prices to import prices.[1]

Table of Contents

  1. 13 relations: Economy, Export, F. W. Taussig, Final good, Import, John Stuart Mill, Microeconomics, Pareto efficiency, Prebisch–Singer hypothesis, Price index, Primary sector of the economy, Robert Torrens (economist), Utility.

  2. International trade theory

Economy

An economy is an area of the production, distribution and trade, as well as consumption of goods and services.

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Export

An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country.

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F. W. Taussig

Frank William Taussig (1859–1940) was an American economist who is credited with creating the foundations of modern trade theory.

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Final good

A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike an intermediate good, which is used to produce other goods.

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Import

An importer is the receiving country in an export from the sending country.

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John Stuart Mill

John Stuart Mill (20 May 1806 – 7 May 1873) was an English philosopher, political economist, politician and civil servant.

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Microeconomics

Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

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Pareto efficiency

In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way".

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Prebisch–Singer hypothesis

In economics, the Prebisch–Singer hypothesis (also called the Prebisch–Singer thesis) argues that the price of primary commodities declines relative to the price of manufactured goods over the long term, which causes the terms of trade of primary-product-based economies to deteriorate. Terms of trade and Prebisch–Singer hypothesis are international trade theory.

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Price index

A price index (plural: "price indices" or "price indexes") is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.

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Primary sector of the economy

The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining.

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Robert Torrens (economist)

Robert Torrens (1780 – 27 May 1864) was a Royal Marines officer, political economist, part-owner of the influential Globe newspaper, and a prolific writer.

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Utility

In economics, utility is a measure of the satisfaction that a certain person has from a certain state of the world.

See Terms of trade and Utility

See also

International trade theory

References

[1] https://en.wikipedia.org/wiki/Terms_of_trade

Also known as Export-to-import ratio.