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in the gravity equation, what are two most important determinants that affect (one positively and once...

in the gravity equation, what are two most important determinants that affect (one positively and once negatively) trade flows ?

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Expert Solution

Gravity equation is something holds the interaction between two places can be determined by the product of the population by both the places determined by the square of distance from other.

The determination that affect the trade flow are.

*Trade cost that increase with distance

*using gravity model countries with similar income have been shown to trade more.

Rahul Sunny answered 1 year ago
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