The Gravity Theory of international trade says that the quantity of trade between two countries is positively related to __________________ and negatively related to _________________________.
A)the value of the products produced by each country;the political leanings of each country.
B)the countries' GNP;the distance between the countries.
C)the status of the world economy;the economy of each country.
D)whether each country is a developed country or a developing country;the political leanings of each country.

Question

Quizplus · Accepted Answer

According to the Gravity Theory, the volume of trade between two countries is positively related to their economic size (measured by GNP) and negatively related to the distance between them. Other factors, such as cultural similarities, language, and trade agreements, may also influence trade flows, but the gravity model emphasizes the importance of economic size and distance as the main determinants of trade patterns. Therefore, option B is the correct answer.

The Gravity Theory of International Trade Says That the Quantity