MBA 680 EXAMS (1-3) | 60 COMPLETE
VERIFIED QUESTIONS WITH DETAILED
SOLUTIONS | 2026 LATEST UPDATED | GRADE
A+
What has been the long term relationship between economic growth and trade growth?
- answer-countries with higher rates of GDP growth also tend to have higher rates of
growth in trade as a share of output.
What are the main drivers of this relationship, economic growth and trade growth, and
how might they change over time - answer-trade is indeed one of the factors driving
national average incomes (GDP per capita) and macroeconomic productivity (GDP per
worker) over the long run. Limits in capital and labor/capabilities over time.
Describe the gravity model of international trade - what does it say and how is it useful
to understand the relationship between trade and GDP, and trade and distance -
answer-Gravity Model: the volume of trade between any two countries fairly accurately,
size of economy and distance between two trading countries are big factors.
countries trade competitiveness; must be considered not only from changes in their
bilateral competitiveness, but any changes in competitiveness with other partners also.
How "economic" gravity between two countries can be affected by changed in internal
trading costs. Essentially consumers choose between domestic goods and foreign
goods, and relative changes in costs of providing domestic to foreign goods matter.
Has trade between countries remained fairly constant in terms of the amount and
compositionof that trade? What might explain these relationships? - answer-
International trade is at record levels relative to the size of the world economy, thanks to
falling costs of transportation and communications. However, trade has not grown in a
straight line: The world was highly integrated in 1914, but trade was greatly reduced by
economic depression, protectionism, and war and took decades to recover.
- 1% increase in distance is 1% decrease in trade
VERIFIED QUESTIONS WITH DETAILED
SOLUTIONS | 2026 LATEST UPDATED | GRADE
A+
What has been the long term relationship between economic growth and trade growth?
- answer-countries with higher rates of GDP growth also tend to have higher rates of
growth in trade as a share of output.
What are the main drivers of this relationship, economic growth and trade growth, and
how might they change over time - answer-trade is indeed one of the factors driving
national average incomes (GDP per capita) and macroeconomic productivity (GDP per
worker) over the long run. Limits in capital and labor/capabilities over time.
Describe the gravity model of international trade - what does it say and how is it useful
to understand the relationship between trade and GDP, and trade and distance -
answer-Gravity Model: the volume of trade between any two countries fairly accurately,
size of economy and distance between two trading countries are big factors.
countries trade competitiveness; must be considered not only from changes in their
bilateral competitiveness, but any changes in competitiveness with other partners also.
How "economic" gravity between two countries can be affected by changed in internal
trading costs. Essentially consumers choose between domestic goods and foreign
goods, and relative changes in costs of providing domestic to foreign goods matter.
Has trade between countries remained fairly constant in terms of the amount and
compositionof that trade? What might explain these relationships? - answer-
International trade is at record levels relative to the size of the world economy, thanks to
falling costs of transportation and communications. However, trade has not grown in a
straight line: The world was highly integrated in 1914, but trade was greatly reduced by
economic depression, protectionism, and war and took decades to recover.
- 1% increase in distance is 1% decrease in trade
