What is the value of the index of intra-industry trade for an industry in which exports are $100 million and imports are $200 million?
A) 100/300 = 0.33
B) (100 + 200)/100 = 3.00
C) 100/[1/2 · (100 + 200)] = 0.67
D) 100/200 = 0.50

Question

Quizplus · Accepted Answer

The index of intra-industry trade measures the proportion of trade that occurs between countries in the same industry. The formula is:

Intra-Industry Trade Index = Exports / (0.5 * (Exports + Imports))

Using the figures given, the index of intra-industry trade would be:

IIT Index = 100 / (0.5 * (100 + 200)) = 100 / 150 = 0.67

Therefore, the correct answer is C.

What Is the Value of the Index of Intra-Industry Trade