Explain how the terms of trade index is calculated and what it means

It is a ratio of prices received for exports over prices paid for imports and multiplied by 100 . The index
expresses prices received by a country as a percent of prices paid for its imports. Greater than 100 means
goods exported have a higher value than those imported which is generally judged to be good. There is a
potential for countries exporting high valued products to be able to compete more effectively in
international markets. This index is especially useful when looking at changes over time. Such changes
indicate whether a country's trade position is becoming better or worse. For example, an index that falls
from 100 to 75 indicates that a country's export product prices are only 75% of its import prices when they
used to be 100%—thus, in relation to the past, what it imports is relatively more expensive.