When and under what circumstances is intervention in international trade justified on market correction grounds? What preconditions would have to be met from the government side for there to be a reasonable likelihood of success?

Let C represent consumption expenditure, S saving, I gross private domestic investment, G government expenditure on goods and services, and X - M net exports of goods and services. Then GDP equals

A) C + S + G + X - M. B) C + S + G - X - M. C) C + I + G + X - M. D) C + I + G - X - M.

Suppose that there are two factors, capital and land, and that the United States is relatively land endowed while the European Union is relatively capital-endowed. According to the Heckscher-Ohlin model

A) European capitalists should support U.S.-European free trade. B) European landowners should support U.S.-European free trade. C) all capitalists in both countries should support free trade. D) all landowners should support free trade. E) the U.S. should compensate European countries once trade commences.