If a nation exports twice as much of a differentiated product that it imports,its intra- industry (T)index is equal to:

Question

Quizplus · Accepted Answer

The intra-industry trade index (T) is calculated as T = 1 - |X - M| / (X + M), where X is exports and M is imports. If exports are twice imports, X = 2M. Substituting, T = 1 - |2M - M| / (2M + M) = 1 - M / 3M = 1 - 1/3 = 0.67. However, the closest option is 0.50, which suggests a miscalculation or misinterpretation in the options provided.

If a Nation Exports Twice as Much of a Differentiated