Equation (2.1) says that trade between any two countries is proportional to the product of their GDPs.
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Equation (2.1) says that trade between any two countries is proportional to the product of their GDPs. Does this mean that if the GDP of every country in the world doubled, world trade would quadruple? Analyze this question using the simple example shown in Table 2-2.
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Related Book For
International Economics Theory & Policy
ISBN: 9780138002121
8th Edition
Authors: Paul R Krugman, Maurice Obstfeld
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