Over the last few decades, East Asian economies have increased their share of world GDP. Similarly, intra-East Asian tradethat is, trade among East Asian nationshas grown as a share of world trade. More than that, East Asian countries do an increasing share of their trade with each other. Using the gravity model, explain why East Asian countries do an increasing share of their trade with each other. A. Since the GDP of East Asian countries has grown, the product of any two East Asian countries' GDP is now larger. And as the gravity model predicts, the trade volume between them has grown.
B. The GDP of some East Asian countries has grown faster than others; therefore, the difference in GDP between some East Asian countries is now larger. And as the gravity model predicts, exports from richer countries to poorer countries have increased.
C. Since the GDP of East Asian countries has grown, the ratio of any two East Asian countries' GDP is now larger. And as the gravity model predicts, the trade volume between them has grown.
D. The GDP of some East Asian countries has grown faster than others; therefore, the difference in GDP between some East Asian countries is now larger. And as the gravity model predicts, exports from poorer countries to richer countries have increased.