Author Question: The gravity model suggests that over time A) trade between neighboring countries will increase. ... (Read 48 times)

tnt_battle · **on:** Jun 30, 2018

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.

Question 2

If an economy experiences an increase in its labor force, everything else constant, then its production possibilities frontier (PPF) will

A) expand outward but keep its original shape.
B) expand outward largely in the direction of the labor intensive good.
C) expand outward largely in the direction of the capital intensive good.
D) not expand until capital grows.