Editing Terms of trade (section)

==Multi-commodity multi-country model==
[[File:ABS-5206.0-AustralianNationalAccounts-NationalIncomeExpenditureProduct-KeyNationalAccountsAggregates-TermsTrade-Index-A2302478J.svg|thumb|right|300px|The terms of trade of Australia since 1959.  Note the effect of the resources boom from 2005.]]
In the more realistic case of many products exchanged between many countries, terms of trade can be calculated using a [[Laspeyres index]]. In this case, a nation's terms of trade is the ratio of the Laspeyre price index of exports to the Laspeyre price index of imports. The Laspeyre export index is the current value of the base period exports divided by the base period value of the base period exports. Similarly, the Laspeyres import index is the current value of the base period imports divided by the base period value of the base period imports.

<!--------------------------------FORMULA------------------------------>
:<math>({{p_x^c\, q_x^0}\over{p_x^0\, q_x^0}}
\left/
{{p_m^c\, q_m^0}\over{p_m^0\, q_m^0}})*100\right.</math>

Where

:<math>p_x^c=</math> price of exports in the current period

:<math>q_x^0=</math> quantity of exports in the base period

:<math>p_x^0=</math> price of exports in the base period

:<math>p_m^c=</math> price of imports in the current period

:<math>q_m^0=</math> quantity of imports in the base period

:<math>p_m^0=</math> price of imports in the base period
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