Question
Please I need answer for This question at the moment about one hour because i have assignment today,and it is very important and I need
Please I need answer for This question at the moment about one hour
because i have assignment today,and it is very important and I need solution for this issue with all the details .please you can write the answer typing and not write by hand,so that I can read and understand your answer clearly.I need step by step solution to the following this question asap .I have limited time so please do it quickly with detailed explanation.thanks in advance/Ha
1. The gravity model has been successful in describing trade volumes between countries. This question will ask you about its properties and some related matters.
a) Write down the equation that describes the gravity model. What are the two key variables in addition to geographic distance and why do they matter for aggregate trade? Explain your answer.
b) List three additional variables (in addition to the ones asked for in a and to trade agreements) that also tend to explain international trade. Explain why they matter.
c) Trade agreements are often found to increase international trade. What is the main difference between a customs union and a free trade area? Explain your answer.
d) The goal when two countries sign a trade agreement is generally to increase bilateral trade. But such an increase can be caused both by so-called trade diversion and trade creation. Explain the difference between the two and whether and why they are good or bad for welfare.
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