Terms of trade

What is Terms of trade?

Terms of trade meaning in Labor terms is Allocation of inputs into two or more economies that take advantage of differences in comparative advantages and, through specialization, improve the production of the economies. Note that a change in the terms of trade should cause all domestic production to change (that is, reallocates all inputs), rather than just imports.


reference: Glossary: U.S. Bureau of Labor Statistics – United States Department of Labor