The gravity equation uses a calculation to predict the level of bilateral trade based directly on ____ and inversely on _____.
a. wages; technology
b. size of the countries' GDP; the geographic distance between the countries
c. the percent of the countries' GDP in manufacturing; their level of tariffs
d. the growth rates of the countries' GDP; their openness to trade
Ans: b. size of the countries' GDP; the geographic distance between the countries
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Microeconomics examines the
A) total household expenditures. B) behavior of the economy as a whole. C) aggregate business spending. D) decision making undertaken by individual households.