Question

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. D) This is because these neighboring countries have exceptionally large GDPs. E) This relates to Belgium's trade record with the U.S.

Answer 1

Answer:

B) This is consistent with predictions from gravity models.

Explanation:

Gravity model suggests that the volume of trade that occurs between countries close to one another exceeds those with other countries that are are away.

Distance between nations is seen to have a negative effect on the volume traded between two nations. So the further a nation the less trade that will be done with it.

In the given scenario where two neighbors of the United States do a lot more trade with the United States than European economies of equal size, it is consistent with the gravity model.