The Terms of Trade (TOT)is Defined as
A)(index of Export $R^{*}$

question 40

Multiple Choice

The terms of trade (TOT) is defined as

• A)(index of export prices)/(index of import prices).
• B)(home-country currency)/(foreign-country currency).
• C) \( R^{*} \) (\( \frac{P^{*}}{P} \))
• D) \( R^{*} \) (\( \frac{P}{P^{*}} \))
• E)having a competitive advantage over other nations.

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Definitions:

Saving

The action of setting aside a portion of one's income or resources for future use or investment.

Disposable Income

The financial resources that households can allocate towards savings and expenditures after income tax deductions.

Saving

The portion of income not spent on current consumption, often put aside for future use or investments.

Disposable Income

Funds available to households for saving and spending once income taxes are deducted.