INTRA-INDUSTRY TRADE MEASURE (Chapter 5)

Country ABC exports to and imports from other countries, in the industries j= 1, 2, ..., 6.

Good jExport of jImport of j

Total exportsTotal imports

11/41/4

21/41/4

301/4

40

51/41/4

600

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i.Are there an intra-industry trades in any of the six industries? Explain.

ii.Which trades are balanced in the six industries?

iii.Calculate the IIT index for intra-industry trade. What do explain this number?