SSC CGL 2023 PYQ — Question 46

The correct answer is option 4 i.e. the ratio between export prices and import prices.

• The term "terms of trade" refers to the ratio at which one country's goods trade for those of another country. It measures the relative prices of a country's exports compared to its imports. Specifically, it is calculated as the price index of exports divided by the price index of imports, and then multiplied by 100. 
• A favorable terms of trade means that a country can obtain more imports for a given quantity of exports, indicating better trading conditions. Conversely, an unfavorable terms of trade means that a country has to export more to obtain the same amount of imports, indicating less advantageous trading conditions.