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

question 14

Multiple Choice

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

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Definitions:

Complement

A good or service that is used together with another, where an increase in demand for one leads to an increase in demand for the other.

Substitute

A product or service that can be used in place of another to satisfy similar needs or desires.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Demand Decreases

A situation where the quantity of a product or service sought by buyers is less than it was previously, often leading to lower prices.