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Terms of Trade

Terms of Trade is a proxy of a country’s trading efficiency and it is calculated as the ratio of a country’s export prices to its import prices. Terms of Trade reached an all-time high of 110.3 in July 2008 and an all-time low of 81.2 in October 1998. The figure is published monthly by Statistics Canada. If this ratio is higher than 100% this means that the country is total trading is more efficient having higher aggregate exports than the corresponding aggregate imports.