In international trade, what is the term for the rate at which one country's product is exchanged for another country's product?

• A. Comparative advantage
• B. Opportunity cost
• C. Terms of trade
• D. Absolute advantage

Answer: (C)

Verified step by step guidance

1. Understand that the question is asking for the specific term that describes the rate at which one country's product is exchanged for another country's product in international trade.
2. Recall the definitions of the options: 'Comparative advantage' refers to the ability of a country to produce a good at a lower opportunity cost than another country.
3. 'Opportunity cost' is the cost of forgoing the next best alternative when making a decision.
4. 'Absolute advantage' means a country can produce more of a good with the same resources than another country.
5. Recognize that 'Terms of trade' specifically refers to the ratio or rate at which goods from one country are exchanged for goods from another country, making it the correct term for this concept.