Which of the following is the formula for the intra-industry trade (IIT) share in a product's total trade?

Question

Quizplus · Accepted Answer

The formula for the intra-industry trade (IIT) share in a product's total trade is given by option C. This formula calculates the proportion of a country's trade in a particular product that is accounted for by intra-industry trade (i.e., trade within industries). The numerator in the formula is the absolute value of the difference between a country's exports (X) and imports (M) of the product, while the denominator is the sum of the country's exports and imports of the product. The result of this calculation is subtracted from 1 to give the IIT share. Option A is incorrect because it does not include the denominator, which is necessary for calculating a proportion. Option B is incorrect because it uses a different formula that does not take into account the absolute value of the difference between exports and imports. Option D is incorrect because it includes a negative sign in the denominator, which would result in an incorrect calculation.

Which of the Following Is the Formula for the Intra-Industry 1−∣X−M∣ 1-|X-M| 1−∣X−M∣

Which of the Following Is the Formula for the Intra-Industry $1-|X-M|$