What is a Term of Trade (TOT)?
How is a Term of Trade (TOT) Used as an Indicator?
What are the Factors that Affect a Term of Trade (TOT)? Where does the word tot come from? The word "tot" is derived from the Old English word "tott," meaning "small amount." This word likely came into English from the Proto-Germanic word "tot," meaning "small."
What is an example of terms of trade?
In economics, the terms of trade (ToT) refer to the ratio of export prices to import prices, and is used as a measure of the relative competitiveness of a country's exports. The ToT can be decomposed into two components: the price index of exports and the price index of imports. The ToT can also be decomposed into the relative prices of exportable and importable goods.
In its simplest form, the ToT measures the average price of a country's exports in terms of the average price of its imports. A country is said to have a trade surplus if its ToT is greater than 1, and a trade deficit if its ToT is less than 1. The ToT can also be expressed as a percentage change:
ToT = (Px - Py) / Py
where Px is the export price index and Py is the import price index.
The ToT is a useful measure of competitiveness because it captures both the relative prices of a country's exports and imports, as well as the volumes of trade. The ToT can therefore be used to compare the competitiveness of different countries' exports, and to identify trends in a country's competitiveness over time.
What is full name tot?
There is no definitive answer to this question as "tot" could be short for any number of names. However, some possibilities include "total" or "totaled" (meaning the amount of something), "tote" (meaning to carry or transport), or "totem" (meaning a symbol or emblem). What is the income terms of trade? The income terms of trade (ITT) is an economic index that measures the relationship between a country's export prices and import prices. The income terms of trade is calculated as the ratio of a country's export prices to its import prices. A country with a higher income terms of trade will export more goods and services relative to its imports, while a country with a lower income terms of trade will import more goods and services relative to its exports.
The income terms of trade can be used to measure a country's competitiveness in the international market. A country with a higher income terms of trade is said to be more competitive than a country with a lower income terms of trade. The income terms of trade can also be used to measure the relative welfare of a country's citizens. A country with a higher income terms of trade will have a higher standard of living than a country with a lower income terms of trade.
How does terms of trade affect exchange rate?
The terms of trade (ToT) is the ratio of a country's export prices to its import prices, and is used as an indicator of the relative competitiveness of a country's exports. A country with a high ToT (i.e. a high ratio of export prices to import prices) is said to have a "favourable" ToT, while a country with a low ToT has an "unfavourable" ToT.
ToT is important because it affects a country's balance of trade, and hence its exchange rate. A country with a favourable ToT will tend to have a trade surplus (i.e. it exports more than it imports), while a country with an unfavourable ToT will tend to have a trade deficit (i.e. it imports more than it exports).
A country's ToT can be affected by a number of factors, including changes in the prices of its exports and imports, and changes in the mix of its exports and imports (i.e. the types of goods and services that it exports and imports).
Changes in a country's ToT can have a significant impact on its exchange rate. A country with a favourable ToT will tend to see its currency appreciate (i.e. its exchange rate will increase) as its trade surplus increases, while a country with an unfavourable ToT will tend to see its currency depreciate (i.e. its exchange rate will decrease) as its trade deficit increases.