What is the value of the intra-industry trade index for an industry in which exports are $200 million and imports are $20 million?
A) 2.00
B) (200 + 20)/20 = 11.00
C) 20/[1/2 · (200 + 20)] = 0.18
D) (200 - 20)/200 = 0.90

Question

Quizplus · Accepted Answer

The intra-industry trade index is calculated as (Exports - Imports) / (Exports + Imports), which simplifies to the absolute value of exports minus imports divided by the sum of exports and imports. For this industry, it would be |200 - 20| / (200 + 20) = 180 / 220 = 0.818 (rounded to two decimal places, the correct formula and calculation were not provided in the options, but option C's formula is closest to the correct approach despite the numerical error in the explanation).

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