Question

exports %

39.70%

19.76%

8.09%

4.01%

3.87%

3.06%

3.04%

2.36%

2.20%

2.08%

1.92%

1.59%

1.52%

1.10%

1.09%

1.04%

0.96%

0.92%

0.89%

0.81%

GDP %

21.01%

11.27%

2.86%

4.06%

36.50%

0.42%

0.00%

0.66%

0.71%

0.92%

2.00%

5.99%

0.00%

0.85%

0.60%

0.05%

1.90%

1.63%

0.37%

8.21%

use excel to make

scatter plot which GDP as determinant of trade. this scatter plot should have percent of GDP as horizontal axis, exports % as vertical axis. also explain whether scatterplot show correlation between size of economy & bilateral trade volume as predicated by gravity model of trade.

note: country is australia, here are top 20 trading partners exports and gdp.

Answer 1

Here the scatter plot shows the points are scattered far away from trend line path. And correlation coefficient is 0.238 which is far lower than 1 so there is a very poor correlation between the size of the economy and bilateral trade volume.