Why does the gravity model work?A) Large economies became large because they were engaged in international trade.B) Large economies tend to have large incomes and tend to spend more on imports.C) Large economies have relatively large incomes, and hence spend more on governmentpromotion of trade and investment.D) Large economies tend to avoid trading with small economies.E) Large economies have relatively larger areas which raises the probability that a productiveactivity will take place within the borders of that country

The gravity model works for several reasons. Firstly, large economies tend to have a higher level of international trade. This is because they have the resources, infrastructure, and market size to engage in trade with other countries. Therefore, option A, which states that large economies became large because of international trade, is a valid reason for the gravity model to work.

Secondly, large economies generally have higher incomes and tend to spend more on imports. This is because they have a greater purchasing power and demand for goods and services from other countries. Option B, which suggests that large economies have large incomes and spend more on imports, is another reason why the gravity model is effective.

Additionally, large economies often have the means to promote trade and investment through government policies and initiatives. This can include measures such as trade agreements, investment incentives, and export promotion programs. Option C, which states that large economies spend more on government promotion of trade and investment, is another factor that contributes to the effectiveness of the gravity model.

It is not accurate to say that large economies tend to avoid trading with small economies, as trade can occur between economies of different sizes. Therefore, option D is not a valid reason for the gravity model to work.

Lastly, the size of an economy, in terms of its area, can also influence the probability of productive activities taking place within its borders. Larger economies may have more diverse geographic regions, resources, and industries, which can attract productive activities. Therefore, option E, which suggests that larger economies have a higher probability of productive activities due to their larger areas, is another reason why the gravity model is applicable.

In conclusion, the gravity model works because large economies have a history of engaging in international trade, have higher incomes and spending on imports, promote trade and investment through government policies, and have a higher probability of productive activities due to their larger areas.