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Essay from the year 2008 in the subject Business economics - Trade and Distribution, grade: 18/20, Solvay Brussels School of Economics and Management, language: English, abstract: From 1971 to 2006, terms of trade changes had a negative and rather small effect on welfare in Iceland. For this covered period, the average yearly percentage growth of Iceland’s terms of trade was minus 0.21%. The time series diagram and the time trend line show this downward trend of Iceland’s terms of trade. The yearly average percentage change in GDP due to terms of trade was minus 0.05%. This effect is very small compared to the actual 24.34% average annual growth of Iceland's GDP (EconLit F110, F140, O470).