Which of the following industries would be associated with an IIT index close to zero?
A) perfume
B) cars
C) beer
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

An IIT index close to zero would suggest that the industry in question is characterized by either only exporting or only importing, but not both. This is less likely in industries with differentiated products or where both exports and imports are common due to consumer preferences for variety and brand differentiation.
a. Perfume - This industry often has a significant amount of both imports and exports due to brand differentiation and global demand for various scents, suggesting a higher IIT index.
b. Cars - The automobile industry typically has a substantial amount of intra-industry trade as countries often export and import different brands and models of cars, indicating a higher IIT index.
c. Beer - While there is some level of intra-industry trade in beer due to different tastes and preferences, it might be less than in industries like cars or perfume. However, it is still likely to be above zero.
Therefore, none of the industries listed are typically associated with an IIT index close to zero. The correct answer would be:
e. none of the above
Each of these industries is likely to have some level of intra-industry trade, meaning that they would not have an IIT index close to zero.

Which of the Following Industries Would Be Associated with an IIT