The higher the value for the index of intraindustry trade:
A)the lower total trade is for other products.
B)the greater percentage of trade in that good is intra industry.
C)the more we should be concerned about job loss and outsourcing.
D)the higher the gains from trade.

Question

The higher the value for the index of intra­industry trade:
A)the lower total trade is for other products.
B)the greater percentage of trade in that good is intra­ industry.
C)the more we should be concerned about job loss and outsourcing.
D)the higher the gains from trade.

Quizplus · Accepted Answer

The index of intra-industry trade measures the percentage of trade in a specific good that is intra-industry, meaning it is trade between countries of similar levels of economic development and production of that good. Therefore, as the value of the index increases, it indicates a greater percentage of trade in that good is intra-industry. This is a positive indicator for countries as it represents specialization and the potential for greater gains from trade. The other choices are not necessarily related to the index of intra-industry trade.

The Higher the Value for the Index of Intra­industry Trade

The Higher the Value for the Index of Intraindustry Trade