The gravity model offers a logical explanation for the fact that
A) trade between Asia and the U.S. has grown faster than NAFTA trade.
B) trade in services has grown faster than trade in goods.
C) trade in manufactures has grown faster than in agricultural products.
D) Intra-European Union trade exceeds international trade by the European Union.
E) the U.S. trades more with Western Europe than it does with Canada.

Question

Quizplus · Accepted Answer

The gravity model suggests that trade is influenced by the size of the economies involved and the distance between them. Intra-European Union trade is expected to be high because the countries in the EU are geographically close and have large economies.

The Gravity Model Offers a Logical Explanation for the Fact