Terms of trade: calculation, causes, trends and effects

What this note covers

1. Calculate the index and interpret its purchasing-power meaning
2. World demand, supply and Australia’s commodity exposure
3. Income, consumption, saving and investment effects
4. Inflation, output and the exchange rate transmission
5. Read official Australian data precisely
6. Answer calculation and evaluation questions as one argument

6 sections · 10 key terms & formulas · 6 common mistakes