What Do Tests of the Gravity Equation for Trade Between

question 63

Multiple Choice

What do tests of the gravity equation for trade between Canadian provinces and American states indicate?

• A) Individual state and individual provincial GDPs are negatively related to the amount of trade between individual states and provinces.
• B) Individual state and individual provincial GDPs are positively related to the amount of trade between individual states and provinces.
• C) Individual state and individual provincial GDPs are not at all related to the amount of trade between individual states and provinces.
• D) The gravity equation does not apply to U.S.-Canadian trade.

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Definitions:

Special Batch

A unique production run of goods, often made to fulfill a specific requirement or order.

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An allergic reaction that occurs when one's immune system overreacts to proteins in peanuts, potentially causing severe and life-threatening reactions.

Syndicate

A group of individuals or organizations combined to promote some common interest, commonly used in reference to banking, investment, or insurance groups.

Financing

The process of providing funds for business activities, making purchases, or investing.