The Gravity Model of International Trade Predicts That Trade Between

question 7

Multiple Choice

The gravity model of international trade predicts that trade between two nations is larger

• A)the larger the two nations
• B)the closer the nations
• C)the more open are the two nations
• D)all of the above

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Definitions:

Salvage Value

The projected sell-on value of a property when it reaches the end of its operational lifespan.

Internal Rate

Often referred to as Internal Rate of Return (IRR), it is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Payback Period

The duration required for an investment to produce a sum of money or cash value equal to the investment's cost.

Simple Rate

An interest calculation method where interest is calculated on the principal amount only, without compounding.