The gravity equation uses a calculation to predict the level of
Bilateral trade based directly on ____ and inversely on _____.
A)wages; technology
B)size of the countries' GDP; the geographic distance between the countries
C)the percent of the countries' GDP in manufacturing; their level of tariffs
D)the growth rates of the countries' GDP; their openness to trade

Question

Quizplus · Accepted Answer

The gravity equation predicts bilateral trade based directly on the size of the countries' GDP and inversely on the geographic distance between the countries.

The Gravity Equation Uses a Calculation to Predict the Level