If a country exports $1 billion worth of fish each year and imports $4 billion worth of fish,then the measure of intra-industry trade among its fisheries is

Question

Quizplus · Accepted Answer

The measure of intra-industry trade can be calculated using the formula: (Exports - Imports) / (Exports + Imports) in absolute value. Plugging in the values: |1 - 4| / (1 + 4) = 3/5 = 0.6. However, the correct formula for calculating the Grubel-Lloyd index (a common measure of intra-industry trade) is: 1 - (|Exports - Imports| / (Exports + Imports)). Using the given values: 1 - (3/5) = 2/5 = 0.4. Therefore, the correct answer is 0.4, which corresponds to choice B.

If a Country Exports $1 Billion Worth of Fish Each