The "Income Terms of Trade" Index Would Be Calculated by Which

question 11

Multiple Choice

The "income terms of trade" index would be calculated by which one of the following formulas (where P_X = price index of exports, P_M = price index of imports, Q_X = quantity index of exports, and Q_M = quantity index of imports) ?

• A) (P_X/P_M).100
• B) (Q_M/Q_X).100
• C) (P_X.Q_X)/P_M
• D) (P_X.Q_X)/(P_M.Q_M ).100

---

Definitions:

Interest Income

Interest income is the revenue earned from deposit accounts or investments through the lending of money or the use of capital.

Bond Premium

The amount by which the market price of a bond exceeds its principal amount or face value.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.