The rate at which a country's export is exchanged for her imports is

Step 1: Analyze the question The question asks for the term that describes the rate at which a country's exports are exchanged for its imports. In other words, how many units of imports one unit of exports can buy.

Step 2: Explain the concepts

• Trade balance: the difference between the value of a country's exports and imports of goods (visible trade) only.
• Balance of payments: a systematic record of all economic transactions between a country and the rest of the world over a period, usually a year.
• Terms of trade: the ratio at which a country's exports exchange for its imports. It is calculated as:

Terms of trade = (Index of export prices ÷ Index of import prices) × 100

• Balance on current account: the part of the balance of payments covering visible trade, invisible trade (services), and transfers.

Step 3: Match the definition Only the terms of trade measures the exchange rate between exports and imports. The other options measure differences or records of payments, not an exchange ratio.

• If export prices rise faster than import prices, the terms of trade improve (favourable). The country gets more imports for the same quantity of exports.
• If import prices rise faster, the terms of trade worsen (unfavourable).

Step 4: Answer The correct option is **C.

Tip: Think of "terms of trade" as the "price of exports in terms of imports". If the question uses the words rate, ratio, or exchanged for, it is pointing to terms of trade. If it uses record or difference, think balance of payments or trade balance.