CHAPTER 2 - CHAPTER 2 Multiple Choice 1. The gravity model...

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CHAPTER 2 Multiple Choice 1. The gravity model suggests that over time A) trade between neighboring countries will increase. B) trade between all countries will increase. C) world trade will eventually be swallowed by a black hole . D) trade between Earth and other planets will become important. E) the value of trade between two countries will be proportional to the product of the two countries' GDP. 2. In general, which of the following do not tend to increase trade between two countries? A) linguistic and/or cultural affinity B) historical ties C) larger economies D) mutual membership in preferential trade agreements E) the existence of well controlled borders between countries 3. The two neighbors of the United States do a lot more trade with the United States than European economies of equal size. A) This contradicts predictions from gravity models. B) This is consistent with predictions from gravity models. C) This is irrelevant to any inferences that may be drawn from gravity models.
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This note was uploaded on 09/01/2011 for the course ECON 3150 taught by Professor Allalileeva during the Summer '09 term at York University.

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CHAPTER 2 - CHAPTER 2 Multiple Choice 1. The gravity model...

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