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.
E
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Answer the following statement true (T) or false (F)
1) Although sleeping in on a work day or school day has an opportunity cost, sleeping late on the weekend does not. 2) An economy will always operate at some point on its production possibilities curve. 3) In drawing a particular budget line, money income and the prices of the two products are fixed. 4) The lower the consumer's income, the higher his or her budget line.
Critics of trade adjustment assistance argue that:
A. the small fraction of workers losing jobs to international trade are no more deserving of assistance than others suffering job loss. B. it raises prices for consumers. C. it keeps firms operating in industries where they are no longer competitive. D. it reduces the incentive for firms to invest in new technologies to maintain competitiveness.