Please answer the question.

4) This question pertains to the gravity model of trade. a) What theory underlies the basic gravity model? (2 points) b) What important econometric issues were addressed by Anderson and van Wincoop, on the one hand, and Helpman, Melitz and Rubenstein, on the other? (3 points) 0) Do you see any practical problems in implementing the empirical solutions these authors employ? (3 points) d) Write down an empirical estimation equation to analyze the impact of the China-NZ FTA signed in 2008 on China and NZ trade. Explain your equation and discuss the data (including variables) you need to estimate your model- (6 marks)