The Gravity Model Offers a Logical Explanation for the Fact

question 6

Multiple Choice

The gravity model offers a logical explanation for the fact that

• A) trade between Asia and the U.S. has grown faster than NAFTA trade.
• B) trade in services has grown faster than trade in goods.
• C) trade in manufactures has grown faster than in agricultural products.
• D) Intra-European Union trade exceeds international trade by the European Union.
• E) the U.S. trades more with Western Europe than it does with Canada.

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Definitions:

Total Manufacturing Costs

The aggregate cost of direct materials, direct labor, and manufacturing overhead incurred for products produced.

Distribution Cost

Expenses associated with delivering a product or service from the manufacturer to the end customer, including logistics and transportation.

Manufacturing Costs

Costs associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Direct Labour

The work done by employees directly involved in manufacturing a product or delivering a service, typically accounted for as a variable cost.