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The formula (index of export prices)/(index of import pri...

The formula (index of export prices)/(index of import prices) x 100 is used to measure the____________

A.

Volume of trade between countries

B.

Direction of international trade

C.

Commodity terms of trade

D.

Volume of imports

Correct answer is C

Term of trade refer to the rate at which a country’s exports exchange for its import. It is expressed as a relation between the prices a country receives for its export and the prices it pay for import. Term of trade is usually measured by this mathematical formula.