If exports are indicated by X and imports by M, and index of intra-industry trade (IIT) is given by: 1…
The index ranges from 0 to 1, inclusive. Since \(0\leq |X-M|\leq X+M\), the ratio subtracted from 1 lies between 0 and 1. The index is 1 when exports equal imports and 0…
Choose your answer
If exports are indicated by X and imports by M, and index of intra-industry trade (IIT) is given by:
1 – [(|X – M|) / (X + M)]
The range of this index on intra-industry trade (IIT) is:
Answer and explanation
Correct answer B
The index ranges from 0 to 1, inclusive. Since , the ratio subtracted from 1 lies between 0 and 1. The index is 1 when exports equal imports and 0 when trade is entirely one-way.
Practice for these exams
-
West Bengal SET (WB SET)