The gravity model includes which of the following factors to explain trade (check all that apply):

Question

Quizplus · Accepted Answer

The gravity model of trade posits that bilateral trade flows are directly proportional to the size of the economies involved (measured in GDP or economic output) and inversely proportional to the distance between them. This model does not directly incorporate economies of scale or comparative advantage, although these factors can indirectly affect trade flows by influencing the size of economies and the costs of trading.

The Gravity Model Includes Which of the Following Factors to Explain