The gravity model suggests that over time
A) trade between neighboring countries will increase.
B) trade between all countries will increase.
C) world trade will eventually be swallowed by a black hole.
D) trade between Earth and other planets will become important.
E) the value of trade between two countries will be proportional to the product of the two countries' GDP.

Question

Quizplus · Accepted Answer

The gravity model in international trade posits that the trade flow between two countries is proportional to the product of their economic sizes (GDP) and inversely proportional to the distance between them.

The Gravity Model Suggests That Over Time