Question: Use the following expression for the gravity model and the table's hypothetical data to answer the questions below: Y XY; T; = 0.001x Dij Distance

 Use the following expression for the gravity model and the table'shypothetical data to answer the questions below: Y XY; T; = 0.001x

Use the following expression for the gravity model and the table's hypothetical data to answer the questions below: Y XY; T; = 0.001x Dij Distance from: Distance from: Country GDP Alada Belam Alada $5,000 50 km Belam $5,000 50 km Canson $ 200 km 100 km What is the predicted volume of trade between Alada and Belam? $ (Enter your response as an integer.) If Canson has the same trading volume with Alada as does Belam, Canson's GDP must be $ . (Enter your response as an integer.)The figure to the right displays a scatterplot of hypothetical data for the US and the EU. More specifically, it compares the ratio of US to EU exports with the ratio Ratio of US/EU exports of US to EU labor productivity for 24 industries. 4 (The productivity ratio is measured on the horizontal axis, the export ratio on the vertical axis. And, both axes are given a logarithmic scale.) 2- Which of the following statements does the graph most accurately support? 1- O A. A country's relative productivity will rise when its export ratio rises. O B. Countries will tend to export those goods in which their relative productivity is high. .5- O C. Countries will tend to export those goods in which their absolute productivity is high. 25 O D. The relationship between a country's exports and its relative productivity is tenuous. 0.5 2 4 8 Ratio of US/EU productivity

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