Answer in the questions : • What inter-industry trade are you most familiar with? • What...

Answer in the questions :

• What inter-industry trade are you most familiar with?

• What intra-industry trade are you most familiar with?

Solutions

Expert Solution

Inter-industry trade is a trade of different types of products that belong to different industries between countries.

For instance, the trade of agricultural products produced in one country with technological equipment produced in another country can be classified to be an inter-industry trade. Countries usually engage in inter-industry trade according to their competitive advantages.

Intra-industry trade, on the other hand, is a trade of products that belong to the same industry. As it has been noted, “intra-industry trade (IIT), that is trade of similar products, has been a key factor in trade growth in recent decades. These trends have mostly been attributed to the fragmentation of production (outsourcing and off shoring) as a result of globalisation and new technologies.”

Inter-industry trade is contrasted with intra-industry trade, which is a consequence of imperfect competition, and often takes place between countries with very similar factor endowments.

Rahul Sunny answered 1 year ago

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