Larger countries will trade more with one another; this is
Empirically supported by:
A)the intraindustry trade.
B)the increasing returns to scale.
C)the gravity equation.
D)the comparative advantage.

Question

Larger countries will trade more with one another; this is
Empirically supported by:
A)the intra­industry trade.
B)the increasing returns to scale.
C)the gravity equation.
D)the comparative advantage.

Quizplus · Accepted Answer

The gravity equation empirically supports the idea that larger countries will trade more with one another. The equation takes into account the size of countries (measured by GDP), distance between them, and other relevant factors that affect trade flows. The other answer choices (A, B, and D) are also related to trade patterns, but not as specifically related to the concept of larger countries trading more with each other.

Larger Countries Will Trade More with One Another; This Is