Term of trade - means the quantity of foreign goods and services (imports) that a country can purchase from the proceeds of the sale of its goods and services (exports) of a given quantity; that is not the contractual conditions of sale between a buyer and a seller. It is a measure of a country's trading power. Terms of trade of a country improve when the prices of its exports rise in comparison with the prices of its imports and vice versa.
Index of the ratio of the exports price index to the imports price index. Effectively, this measures the changing volume of imports that can be funded by a unit volume of exports.