What did the gravity equation predict about trade within the borders of a nation?

a. Trade between states or regions within a nation is much more likely than trade outside the borders.
b. Trade between states or regions within a nation is much less likely to occur.
c. There was no predictive value for trade within a nation's borders.
d. Trade between states or regions within a nation is more subject to national law and regulation and therefore not as predictable.


Ans: a. Trade between states or regions within a nation is much more likely than trade outside the borders.

Economics

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