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

Question

Quizplus · Accepted Answer

The gravity model explains trade flows based on the economic size and proximity of countries. Intra-European Union trade is high because EU countries are economically large and geographically close to each other, fitting the gravity model's predictions.

The Gravity Model Offers a Logical Explanation for the Fact