Analysis of Terms of Trade (TOT) Between India and the United Kingdom

Desklib provides past papers and solved assignments for students. This report analyzes the impact of global trade on Terms of Trade.

International Trade
and Enterprise
TERMS OF TRADE (TOT)

Term of Trades (TOT)
 How much an imports an economy gets for a single unit of export.
 Total exports revenue received divided by the total import revenue.
 The fluctuations in the price of currency of one country affects the another
TOT.
 Their is the possibility of getting TOT error in calculations because
thousands of trades transactions are done by the countries.

Facts/statistics of Term of Trade
 The fact is in the process of maintaining the trade surplus, the economic
growth of the country also enhances.
 A country can run on the trade deficit but they may still have trade surplus.
 The TOT shows the increase in the global index points in the last two
years

Industries which showed increasing
trade percentage the global trade cycle
 Automobile trade are done around $1355 Billions in the year
2017
 Crude trade are done around $550 Billions in the same year.
 Trade for petroleum also showed around $684 Billions
transactions in 2017.

Industries which showed decreasing trade
percentage the global trade cycle
 Trade for machinery parts decrease from $684Billions to $594Billions,
2017 and 2018 year respectively.
 Gold trading is also showed the decreasing trend between these two years
2017 and 2018. In 2017, the Gold trading was done around $578 Billions
while in 2018 it was reduced to $550 Billions.
 Electronic goods also displays the same reason. In 2017, it was traded
around $575 Billions while in 2018 it was traded around $425Billions

Trade cycle between India, Australia, China, Japan, United
Kingdom, United States, Germany, Indonesia or Korea
 International trading helping these countries in sharing their resources with each other in
the exchange of money.
 Developed country gets the cheap labor from the under developed countries.
 Underdeveloped countries shares their resources, this process strength their economic
growth.

Factors affecting the trend in ToT
for the chosen pair of countries
 The chosen countries are India and the United Kingdom.
 Demand and Supply are the major factors which always shows their impact.
 Major problem arises when the stable economy deals with the fluctuation
economy.

References
 Robinson, S., Mason-D'Croz, D., Sulser, T., Islam, S., Robertson, R., Zhu,
T., Gueneau, A., Pitois, G. and Rosegrant, M.W., 2015. The international
model for policy analysis of agricultural commodities and trade (IMPACT):
model description for version 3. Wang, X. and Disney, S.M., 2016. The
bullwhip effect: Progress, trends and directions. European Journal of
Operational Research, 250(3), pp.691-701.
 Rodrik, D., 2018. What do trade agreements really do?. Journal of
economic perspectives, 32(2), pp.73-90.
 Vernon, R., 2017. International investment and international trade in the
product cycle. In International Business (pp. 99-116). Routledge.