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Chako Chako
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8 years ago
Why does the gravity model work?
A) Large economies tend to avoid trading with small economies.
B) Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country.
C) Large economies tend to have large incomes and tend to spend more on imports.
D) Large economies became large because they were engaged in international trade.
E) Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment.
Textbook 
International Economics: Theory and Policy

International Economics: Theory and Policy


Edition: 10th
Author:
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machukianmachukian
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8 years ago
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Chako Author
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#2
8 years ago
Makes a lot of sense, and you're right.. I appreciate the input
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#3
7 years ago
Thanks for the feedback, I'm sure others will appreciate it too
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