Suppose that imports and exports in an industry are $100 million and $200 million, respectively. Will the index of intra-industry trade for this industry rise, fall, or remain unchanged if exports fall to $100 million?
a. It will rise.
b. It will fall.
c. It will remain unchanged.
d. There is not enough information to determine how the index will change.
Ans: b. It will fall.
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