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Chapter 19: Q 13. (page 461)

What is intra-industry trade?

Short Answer

Expert verified

The exchange of similar products belonging to the same industry is known as intra-industry trade.

Step by step solution

01

Step 1. Concept

Trade refers to the exchange of goods, services and capital. When this exchnage takes place between different countries, it is known as international trade.

02

Step 2.

The exchange of similar products belonging to the same industry is known as intra-industry trade. In other words, import and export of same type of products. Intra-industry trade allows firms to learn and innovate on products.

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Most popular questions from this chapter

How does comparative advantage lead to gains

from trade?

Are the gains from international trade more likely

to be relatively more important to large or small

countries?

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.

Do consumers benefit from intra-industry trade?

Why might intra-industry trade seem surprising

from the point of view of comparative advantage?
See all solutions

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