If a country is importing 20 units of a product and exporting 10 units, then the IIT index would be approximately:
A) 0.0.
B) 1.0.
C) 0.67.
D) 0.1.
E) 2.48.

Question

Quizplus · Accepted Answer

The Intra-Industry Trade (IIT) index is calculated as 1 - |X - M| / (X + M), where X is the export value and M is the import value. Substituting the given values (X = 10, M = 20) into the formula gives 1 - |10 - 20| / (10 + 20) = 1 - 10/30 = 1 - 1/3 = 2/3, which is approximately 0.67.

If a Country Is Importing 20 Units of a Product