The theory of comparative advantage suggests that nations should produce a good if they:

Which two factors make regulating mergers complicated?

A) First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed. B) First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms. C) First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually. D) First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge.

Suppose policy makers are pursuing a policy to fix the exchange rate. In such a system with perfect capital mobility, an open market sale of domestic bonds by the domestic central bank will eventually result in

A) a permanent increase in the monetary base. B) a permanent reduction in the monetary base. C) a gradual reduction in the domestic interest rate. D) a change in the composition of the monetary base.