In international economics and international trade, terms of trade or TOT is (Price of exportable goods)/(Price of importable goods). In layman's terms it means what quantity of imports can be purchased through the sale of a fixed quantity of exports. "Terms of trade" are sometimes used as a proxy for the relative social welfare of a country, but this heuristic is technically questionable and should be used with extreme caution. An improvement in a nation's terms of trade (the increase of the ratio) is good for that country in the sense that it can buy more imports for any given level of exports. The terms of trade is influenced by the exchange rate because a rise in the value of a country's currency lowers the domestic prices for its imports but does not directly affect the commodities it produces (i.e. its exports).

"Terms of trade" takes a plural form. However, it is a single number that represents the ratio of the relative prices.

John Stuart Mill, FRSE (20 May 1806 – 8 May 1873) was a British philosopher, political economist and civil servant. He was an influential contributor to social theory, political theory, and political economy. He has been called "the most influential English-speaking philosopher of the nineteenth century". Mill's conception of liberty justified the freedom of the individual in opposition to unlimited state control. He was a proponent of utilitarianism, an ethical theory developed by Jeremy Bentham. Hoping to remedy the problems found in an inductive approach to science, such as confirmation bias, he clearly set forth the premises of falsification as the key component in the scientific method. Mill was also a Member of Parliament and an important figure in liberal political philosophy.

John Stuart Mill was born on Rodney Street in the Pentonville area of London, the eldest son of the Scottish philosopher, historian and economist James Mill, and Harriet Burrow. John Stuart was educated by his father, with the advice and assistance of Jeremy Bentham and Francis Place. He was given an extremely rigorous upbringing, and was deliberately shielded from association with children his own age other than his siblings. His father, a follower of Bentham and an adherent of associationism, had as his explicit aim to create a genius intellect that would carry on the cause of utilitarianism and its implementation after he and Bentham had died.