Intra-industry trade theory ?
Correct answer: B. Explains why the United States might export and import differentiated versions of the same product such as different types of autos
- A. Explains why the United States might export autos and import clothing
- B. Explains why the United States might export and import differentiated versions of the same product such as different types of autos
- C. Assumes that transport costs are very low or do not exist
- D. ignores seasonal considerations for agricultural goods
Explanation
Intra-industry trade is two-way trade in differentiated varieties of the same product, such as one country exporting some automobile models while importing others. Trade in unrelated goods, such as autos for clothing, is inter-industry trade.
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