Match each Terms of Trade concept on the left with its correct mathematical formula and in… — JAMB UTME

Match each Terms of Trade concept on the left with its correct mathematical formula and interpretation on the right.

Net Barter (Commodity) Terms of TradeMeasures the relative price of exports in terms of imports: $\left(\frac{P_x}{P_m}\right) \times 100$
Income Terms of TradeMeasures a country's capacity to import based on export earnings: $\left(\frac{P_x}{P_m}\right) \times Q_x$
Single Factoral Terms of TradeAdjusts commodity terms of trade for productivity changes in the export sector: $\left(\frac{P_x}{P_m}\right) \times Z_x$
Gross Barter Terms of TradeMeasures the physical volume ratio of imports to exports: $\left(\frac{Q_m}{Q_x}\right) \times 100$

Net Barter Terms of Trade matches with

\left(\frac{P_x}{P_m}\right) \times 100

; Income Terms of Trade matches with

\left(\frac{P_x}{P_m}\right) \times Q_x

; Single Factoral Terms of Trade matches with

\left(\frac{P_x}{P_m}\right) \times Z_x

; Gross Barter Terms of Trade matches with

\left(\frac{Q_m}{Q_x}\right) \times 100

Each concept correctly maps to its definition and formula: Net Barter Terms of Trade measures price indices (

\% P_x / P_m

), Income Terms of Trade measures capacity to import based on export revenue (

\% P_x / P_m \times Q_x

), Single Factoral Terms of Trade incorporates domestic export productivity (

\% P_x / P_m \times Z_x

), and Gross Barter Terms of Trade measures physical trade quantities (

Q_m / Q_x

Identify the formula for Net Barter Terms of Trade

Net Barter Terms of Trade measures price movement of exports relative to imports:

\left(\frac{P_x}{P_m}\right) \times 100

It forms the baseline commodity terms of trade index.

Identify the formula for Income Terms of Trade

Income Terms of Trade reflects export purchasing power:

\left(\frac{P_x}{P_m}\right) \times Q_x

Multiplying commodity terms of trade by export quantity index (

Q_x

) yields total import capacity derived from exports.

Identify the formula for Single Factoral Terms of Trade

Single Factoral Terms of Trade incorporates domestic productivity:

\left(\frac{P_x}{P_m}\right) \times Z_x

Z_x

represents the productivity index in the domestic export sector.

Identify the formula for Gross Barter Terms of Trade

Gross Barter Terms of Trade evaluates physical quantities of trade:

\left(\frac{Q_m}{Q_x}\right) \times 100

Unlike Net Barter TOT which uses prices, Gross Barter TOT compares the total quantity of imports received to exports given up.

Terms of Trade Concepts and Formulas

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