Suppose that trade volume between any pair of countries i and j, Tij, is given by the following gravity model: Tij = Z * Yi * Yj /Dij Country GDP (Y) Distance from A Distance from B A 12000 B 14000 100 C 21000 100 150 a) Suppose Z=0.005. What is the distance between A and C if the trading volume between A and B is the same as the trading volume between A and C? Show your working. b) Briefly explain the intuition behind why countries with higher GDP are expected to engage in more international trade. c) Suppose A, B and C sign a free trade agreement. How do you expect Z to change?