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Terms of Trade (Causes of SR changes (Change in exchange rate…

- - - - IN DOMESTIC CURRENCY
        :black_small_square: Prices of imports decrease
        :black_small_square: Prices of exports unchanged
        
        TOT improves
- - - - TOT deterioriates
- - - - Inelastic PED
        
        TOT changes in same direction as trade balance
      - Elastic PED
        
        TOT changes in opposite direction
- - - - Commodity export-dependent LDCs face fluctuating TOTs
- - - - Large increases in supply
        
        Reduce global price
    - - :black_small_square: Tariffs lower world demand
        :black_small_square: Subsidies increase world supply
        
        Lower agriculture world price